Bitcoin Breaks Rare Monthly ATH, Where is BTC Price Heading?

Bitcoin (BTC), the world’s largest digital asset, officially closed January at $102,412 price mark.

This marked its first monthly close above $100,000, recognized as a historical trend. This milestone fuels speculation about where the digital asset is heading next.

Bitcoin could be ready for a big jump as past trends match previous market cycles. The supply also shrinks because institutions buy more, favoring a likely rebound.

The PlanB Bitcoin Monthly ATH Close

PlanB, the analyst behind the Stock-to-Flow (S2F) model, has long projected Bitcoin’s climb based on scarcity-driven valuations.

January’s close above $100,000 aligns with S2F projections. This indicated that BTC could be on track for a much larger price move.

Source: X

Historically, once Bitcoin reaches a new monthly ATH, momentum tends to carry the price significantly higher.

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This latest record confirms that Bitcoin is deep into its bull market phase. Once Bitcoin surpassed major psychological levels in previous cycles, it tended to sustain its bullish trajectory.

However, each cycle has shown diminishing price appreciation. Bitcoin’s growth is maturing, requiring more capital to fuel the next leg up.

Another factor to consider is the realized cap, which tracks the total capital invested in Bitcoin.

While previous cycles saw massive surges in realized capital, the current cycle appears more measured, showing a maturing market structure.

The increasing role of institutional investors and the Exchange Traded Funds (ETFs) further support this transition.

The Supply Crunch Impact to Watch

Bitcoin’s supply is drying up fast. Exchange balances have fallen to their lowest level since July 2024, with only 2.74 million BTC available on trading platforms.

This drop is largely driven by institutional accumulation through spot Bitcoin ETF products.

Since their launch in early 2024, these ETFs have absorbed over a million BTC.

Historical patterns suggest that when exchange supply shrinks, Bitcoin’s price rises as demand outpaces available liquidity.

The current trend mirrors previous bull runs, where a supply shock led to a rapid price surge.

Adding to this strain, firms like MicroStrategy continue scooping up massive amounts of the asset.

The Virginia-based company recently added 11,000 BTC to its holdings, totaling 471,107 Bitcoin.

Another key factor in Bitcoin’s supply dynamics is national interest in holding the coin as a reserve asset.

Many U.S. states have reportedly proposed investing part of their treasury in Bitcoin.

Even Czech National Bank Governor Aleš Michl has proposed strategic Bitcoin purchases.

If this materializes, it could further tighten supply and push prices higher.

Despite Bitcoin price’s impressive growth, leverage in the market has increased.

Analysts at CryptoQuant warn that retail traders are taking on excessive risk in derivatives markets.

A rising Estimated Leverage Ratio (ELR) suggests the market is entering an enthusiasm phase similar to the 2021 cycle.

While this signals confidence, it also increases the risk of liquidations, which could cause temporary price dips.

Where is BTC Price Heading Next?

BTC price currently hovers around $102,038, facing resistance at $103,347. A breakout above this level could set the stage for testing $104,000 in the short term.

However, Bitcoin’s long-term trajectory remains bullish. Analysts at Bitwise recently forecast a $200,000 target for 2025, driven by ETF inflows and growing institutional adoption.

The current market structure suggests Bitcoin is entering a critical phase.

While price gains have slowed compared to previous cycles, the ongoing supply crunch and institutional demand create a strong foundation for future growth.

If history is any guide, Bitcoin’s new ATH close could start an even larger rally in the months ahead.

Source: https://www.thecoinrepublic.com/2025/02/01/bitcoin-breaks-rare-monthly-ath-where-is-btc-price-heading/