Bitcoin’s ‘high-risk, high-reward’ phase: Should traders jump in now?

• BTC’ bull run is fueled by a favorable political climate, keeping BTC strong in the $74K-$75K range. 
• However, caution remains, suggesting a potential pullback ahead.

The long-awaited election results are in, and with pro-crypto leadership on the rise, Bitcoin [BTC] has hit a new all-time high. But now comes the real test.

While many view this as a perfect setup, believing strong fundamentals will keep BTC above $68.7k, caution remains. Volatility in options markets and steady new demand in on-chain flows suggest the market could see some sharp moves ahead.

It’s a mix of excitement and uncertainty – bullish momentum is strong, but the path forward may be unpredictable.

Decoding the current market mood 

Psychologically, retail investors are heavily pumping BTC, driven by a long-term bullish outlook. This move makes sense, given Trump’s pro-crypto campaign agenda.

As a result, all asset classes saw a notable spike in trading following Trump’s seating in the White House, with BTC leading the charge, jumping nearly 9%.

Now, with a massive economic shift underway, FOMO is likely to hit investors hard, keeping BTC resilient in the $74K – $75K near-term range. 

However, the path to $100K may be overly optimistic. While macroeconomic factors are fueling the current bull cycle, the human element – tracking price action – must not be overlooked.

If a timely pullback isn’t met, the risk element could factor in, as it did during the March peak when investor optimism surged with inflows into the U.S. Bitcoin ETFs, pushing BTC to an ATH of $73K. 

Yet, within just one week, BTC was back near $60K, as extreme greed caused the market to overheat. Thus, if history is any guide, the current BTC price level is crucial to monitor closely.

Strong fundamentals signal continued growth potential for BTC

Unlike the previous peak, Bitcoin is currently in a high-risk, high-reward phase. Despite the volatility, the market hasn’t become overextended yet. As a result, investors are still betting on BTC’s price to rise, fully aware of the risks involved.

From a psychological perspective, this optimism stems from “anticipation” rather than “execution.” Investors are hopeful that promised regulatory changes will turn the U.S. into a crypto capital.

Historically, post-election liquidity has also sparked a BTC rally. In fact, Bitcoin has never retraced below its election-day price after results are in, making this a key moment for potential gains.

Source : X

Post-election periods typically bring uncertainty, with investors seeking safe-haven assets like Bitcoin. As the economy seeks confirmation, Bitcoin is expected to attract more interest, potentially pushing its price to $80K.

In short, recurring patterns uncovered by AMBCrypto suggest further upside for BTC. The RSI hasn’t hit overbought levels, FOMO remains strong, and these factors reinforce the potential for continued growth.

Still, caution is warranted

Throughout the election buildup, Bitcoin swept liquidity perfectly, triggering high slippage as it surged. 

Source : Coinglass

Read Bitcoin’s [BTC] Price Prediction 2024–2025

The influx of longs in the derivatives market forced shorts to buy back BTC, causing a sharp spike. However, caution is key – any shift could trigger a short resurgence, allowing bears to capitalize, similar to the March peak.

Thus, BTC’s potential to hit $78K is strong, unless options market dominance shifts. After that, a retracement is likely once the market overheats and the election buzz settles, before Bitcoin can break above $80K.