Bitcoin has stabilized around $111,000 following a series of volatile weeks, with analysts at TD Cowen forecasting that the cryptocurrency could reach $141,000 by December. In a recent report, the firm analyzed the recent crash and subsequent recovery in the crypto market, emphasizing the resilience of both Bitcoin and the broader digital currency ecosystem.
Earlier this month, Bitcoin experienced a swift decline triggered by U.S. President Donald Trump’s announcement of a 100% tariff on imports from China, which contributed to a downturn in the entire crypto market, causing a drop of over 10%. The flash crash led to approximately $19 billion in liquidations, marking it as the largest single-day liquidation event in the history of cryptocurrency. Despite this significant sell-off, TD Cowen noted that many exchanges continued to operate with minimal disruption, showcasing the market’s capacity to absorb such shocks.
While many lesser-known tokens suffered substantial losses, Bitcoin displayed relative resilience, initially dropping 15% but ultimately closing just 8% down on the day. According to the analysts, “Though it was the largest single-day liquidation ever, with open interest halved across venues, most crypto exchanges operated with little or no downtime.”
The report credited the market’s recovery to an increase in global adoption of Bitcoin. Notably, Japan has seen a remarkable rise in the number of registered accounts holding digital assets, which has quadrupled over the past five years to surpass 7.9 million. This surge in adoption has prompted Japan’s Financial Services Agency to revisit its longstanding restrictions on banks investing in digital assets like Bitcoin.
As Bitcoin regained some ground, climbing back to $111,000 today after dipping into the $104,000 range last week, renewed corporate accumulation and optimism about the potential conclusion of the U.S. government shutdown contributed to the positive sentiment in the market. Prior to the flash crash, Bitcoin had reached all-time highs in early October, but it has since settled around its current range.
Analysts are now observing key resistance points for Bitcoin at $112,000, $115,500, and $117,600. A decisive break above $122,000 would be needed to shift market sentiment back towards bullish territory. Conversely, if support fails to hold below $105,000, it could potentially lead Bitcoin to test lower levels around $98,000 to $96,000. Looking forward, the upcoming week may experience a modest bounce; however, failure to maintain above $106,900 could usher in the possibility of Bitcoin falling below the $100,000 mark, particularly if the Federal Open Market Committee does not implement a notable rate cut.
