Bitcoin had recently fallen through the $115,000 ceiling. Any relief from this dramatic decline would set the stage for either more bullish or bearish price action to come. Anjali Mehra, a DeFi opinion columnist known for her ability to translate complex topics, breaks down the critical $112,000 support level for Bitcoin. She offers a balanced perspective on bullish institutional forecasts versus bearish macroeconomic pressures, aiming to provide clarity and actionable strategies for investors navigating this volatile landscape. GreedyChain.com strives to provide you with great information, keeping you one step ahead of your competition in the Web3 world.

Understanding Bitcoin's Key Support Levels

Historically, Bitcoin’s price history has been characterized by important support levels that have served as floor during bearish market corrections. During the 2021 bull run, Bitcoin made several checks of the $30,000 level to act as support. Looking even further back, the $20,000 level was a crucial point in 2017. These historic levels present a powerful outlook for identifying key pricing points for where Bitcoin looks to bottom out. January 1st, Bitcoin broke above the $1,000 resistance level for the first time in three years. After March 28th, it never went back there again.

In 2017, Bitcoin reached a high of over $12,000, only to retreat back under $10,000 in early September. The $19,000 price ceiling for the year wouldn’t be surpassed for nearly three more years. In 2017, Bitcoin came down hard and fast, quickly losing the $10,000 mark. By October, it managed to stay above the $10,000s for good. In March 2020, Bitcoin experienced a sudden and sharp decrease in value. It did explode back on the scene like a phoenix, blasting its way back to a peak of $13,880 mid-year and remaining above the $50k level for most of the year.

Technical analysis suggests better approaches to determining whether support could be found. Fibonacci retracements, for instance, provide support resistance levels that traders use to determine bull or bear fixed levels. Standard deviation can help us identify what the potential trading range could look like. Prices within the 1st standard deviation mark the true average price range 68% of the time. When you take a wider lens — two standard deviations — that probability jumps to about 95%. Finally, psychological levels, like the $100,000 barrier, may factor in. This level has proven to be a psychological ceiling ever since first touched in December 2024.

Bullish Forecasts vs. Bearish Realities

Even after recent price gyrations, many experts continue to express bullish sentiment about Bitcoin. Chamath Palihapitiya, for example, recently predicted that Bitcoin will hit an all-time high of $500,000 by October 2025. Bitcoin will be over $1,000,000 within the next 10 years. He sees this development coming from a deliberate cycle of “pump” and “consolidate” seasons. The predictions reflect the long-term bullish outlook that many have for Bitcoin, fueled by increasing adoption and its finite supply.

Eric Balchunas has observed that Bitcoin has experienced "much less volatility and no vomit-inducing drawdowns" since BlackRock's spot Bitcoin ETF filing in June 2023. As such, this has led some analysts to speculate that further institutional involvement may help to curb Bitcoin’s price volatility. Fidelity has similarly described Bitcoin’s key characteristics, claiming that these features render Bitcoin intrinsically different from other digital assets. Bitcoin’s supply halving events have always historically led the way to its biggest bull runs.

It's essential to acknowledge the bearish pressures that could impact Bitcoin's price. Macroeconomic realities including inflation, aggressive interest rate hikes, and regulatory uncertainty can directly lead to market downturns. Such factors can sour investor sentiment and trigger broader sell-offs, exerting downward pressure on Bitcoin.

Actionable Investment Strategies

With so much uncertainty in the air, the right approach will vary for all investors based on their risk tolerance and investment objectives.

Buy

If you’re a long-term believer in Bitcoin and have a high-risk tolerance, do it! Imagine buying Bitcoin today as it trades near support at $112,000. This strategy assumes that Bitcoin will eventually rebound and continue its upward trajectory.

Hold

If you’re an existing Bitcoin owner who has conviction in the long-term utility of Bitcoin and can stomach day-to-day volatility, continue to hold. This playbook means hunkering down in these tough market conditions and holding out for a recovery that may or may not come.

Sell

If you are more risk-averse, or don’t have faith in Bitcoin’s recovery, sell some of your investment. This strategy is very effective in protecting capital while minimizing losses when there’s no clear uptrend.

Introducing the CBTY ETF

For investors seeking a more risk-managed approach to Bitcoin, the Calamos Bitcoin 80 Series Structured Alt Protection ETF (CBTY) offers an interesting option. With this ETF, you have a lot of protection. Shareholders who hold their Fund Shares for a complete Outcome Period will experience 80% downside protection from losses in the price of Spot Bitcoin. After costs and fees, CBTY caps your loss at no more than 20% over its performance term.

  • Pros: Downside protection, potential for upside gains.
  • Cons: Upside cap, fees and expenses.

The fund has an unusual upside cap, though the specific cap is not well delineated for CBTY. Another fund in the series has a considerably lower cap of 24.70% — providing investors a subtly complex blend of risk and reward in the tumultuous Bitcoin market. The outcome period of CBTY is only approximately one year. Throughout this period, the fund seeks to provide positive price return exposure to the CME CF Bitcoin Reference Rate – New York Variant (BRRNY) up to a specified Cap and protection against 80% of downside loss. The CBTY ETF serves as a complementary, robust risk management tool for Bitcoin investors. It provides investors with downside protection from losses but allows for upside appreciation to the Cap.

Learn how to read support levels so you can better understand what bullish and bearish traders are thinking. Learn more about risk-managed investment options, including the CBTY ETF, to help you prepare to navigate the constantly changing Bitcoin landscape.