Bitcoin (BTC) Price Could Hit $97,000 as It Strengthens Against Gold, Analysts Warn of Correction

Bitcoin (BTC) has had an incredible rise in recent days, exceeding $89,000 and rising to the $90,000 mark.

Bitcoin (BTC) price action has been impressive over the past week, surging past the $89,000 level and eyeing the $90,000 mark. As BTC rallied, investors anticipated further gains; however, analysts at QCP Capital highlighted a potential correction.

According to the analysts, Bitcoin futures-based returns hit a seven-month peak, and leveraged positions also increased. Interestingly, futures-based returns didn’t last very long historically, and such rapid increases were followed by corrections, the analysts noted.

With Bitcoin hovering just below the crucial $90,000 level, the analysts noted that the basis rate at the end of November was over 18%.

"High leverage and high 7-month basis (suggesting any pullbacks will be bought aggressively, especially by leveraged longs).

While Bitcoin remains structurally bullish, we caution against any pullbacks, particularly from leveraged liquidations."

The analysts warned of a pullback due to leveraged positions but added that there was strong demand in the options market, with key interest in expiry prices of $110,000 and $120,000.

Bitcoin Could Hit $97,000

In a recent analysis, QCP Capital highlighted how Bitcoin cemented the "digital gold" narrative with a 30% rally after the election.

According to the analysts, Bitcoin surged by 30% since the US elections, while gold dropped by 5%, bolstering BTC's role as "digital gold."

With demand for Bitcoin intensifying and calls for more upside potential, the analysts suggested that a 1% reallocation from gold to Bitcoin could propel BTC to $97,000.

"Recently, capital has been reallocated from traditional safe havens like gold to BTC. Currently at $1.73 trillion, Bitcoin’s market cap recently surpassed silver’s but remains well below gold’s $17.5 trillion.

Even if 1% of the capital flowing from gold into BTC, it could push Bitcoin to around $97,000."