Bitcoin Poised for $120K Breakout in January as Stablecoin Reserves Hit All-Time High

Bitcoin may be on the verge of a rally to $120,000, supported by record stablecoin reserves on Binance and growing investor confidence amid a January effect.

Stablecoin Reserves Suggest Bitcoin’s Breakout Potential

A fresh record high of stablecoin reserves on cryptocurrency exchange Binance suggests that the price of Bitcoin could be preparing to break out to $120,000.

After a 10% fall from its all-time high of $108,300 on December 17, according to statistics from Cointelegraph, Bitcoin might be ready for a rally.

Bitcoin (BTC) might reach a high of more than $120,000 in January, according to Biget Research chief analyst Ryan Lee, driven by the impending inauguration of US President-elect Donald Trump on January 20.

January Effect Could Drive Bitcoin to New Highs

According to the analyst, Bitcoin could reach a local peak above $120,000 before a possible correction caused by investors cashing out. A "'January effect,’ characterized by renewed investments and optimism, though profit-taking from 2024 gains may introduce market corrections, balancing bullish sentiment with caution," the analyst told Cointelegraph.

Spot Bitcoin ETF inflows, US stock market performance, and incoming FTX repayments due for Jan. 3 are important metrics for investors to track when evaluating BTC's success, according to Lee.

Stablecoin Reserves Bolster Bitcoin’s Growth Prospects

In January, Bitcoin will reclaim the six-figure price tag, as predicted by Lee and other analysts.

Bitcoin (BTC) may reach a local high of more than $110,000 in January, according to the global liquidity index, before perhaps correcting.

The almost $45 billion worth of stablecoins that are waiting to be deployed is expected to support Bitcoin's climb during January.

According to CryptoQuant, Binance's stablecoin reserves hit $44.5 billion on December 31st, drawing closer to the $45.8 billion record set on December 11th.

Liquidations Could Propel Bitcoin Beyond $96,400

Since stablecoins are the primary means by which investors can transition from fiat to crypto, an increase in their inflow to cryptocurrency exchanges is indicative of rising investor demand and purchasing pressure.

According to data from CoinGlass, if the price of a cryptocurrency were to rise above $96,400, it would cause more than $1.24 billion worth of leveraged short positions to be liquidated across all exchanges.

Many experts are still bullish on Bitcoin's 2025 potential, with some even projecting a surge to $160,000 thanks to loosening US monetary policy.