Can Bitcoin Get Back up to $100,000 after its 2025 Drop?

The Bitcoin price has dropped recently because of risk-off sentiment, tariffs, and lack of institutional support, despite strong relative performance and dominance as investors flee altcoins amid broader market uncertainty. But can it get back up to $100,000?

Testing Time for the “Digital Gold” Bitcoin

One of the most touted qualities of Bitcoin (BTCUSD), the largest cryptocurrency, is its “gold like” characteristic.

Limited to only 21 million pieces (the Hard Cap), Bitcoin becomes scarcer when coins migrate into sticky hands. This scarcity makes Bitcoin valuable, especially in an era of fiat currency where quantitative easing is the norm.

Tariffs, however, are weighing on investor sentiment. As a reminder, Bitcoin is not only a limited asset. Historically, it behaved very much like a risk asset. In fact, it is often a “high-beta” risk-on bet.

Witness the price surge following Trump’s election. Prices nearly 50% to above $100,000 as crypto enthusiasts piled into the asset.

What’s surprising these days is that Bitcoin has been holding relatively steady. Prices appeared to have established support at the former resistance at $75,000 (see below). This supported a rebound back above $85,000.

Bitcoin Re-Asserts Relative Dominance

Another interesting trend at play is the growing relative dominance of Bitcoin in the crypto market.

When risk sentiment collapses, investor flee the riskier cryptos. This is not unlike the way investors dump small cap stocks in favour of blue-chip stocks during a recession. Larger companies are assumed have better resources to withstand adverse economic conditions. But where does the capital go within the crypto ecosystem? Investors often choose Bitcoin, which acts like the traditional gold as featured above.

For example, Ethereum (ETHUSD), the second largest coin by market cap, saw a 60 percent price collapse this year. In comparison, Bitcoin only suffered a 20 percent decline. So traders would prefer holding BTCs since ETH underperforms.

If we measure Bitcoin’s market cap against most other cryptos, we can easily chart BTC’s relative trend. That’s the chart below is about, comparing Bitcoin’s market cap against all other cryptos’ over time.

At 64 percent, BTC’s dominance is now at its highest since early 2021. What this means is that other crypto’s market cap are falling faster and deeper than BTC.

In other words, Bitcoin is holding up better because of higher demand and better relative performance. This trend tend to reinforce as investor sentiment contracts.

 

Will Bitcoin Return above $100,000?

Clearly, the post-election Trump rally is over. Fear now stalks the market as one policy blunder after another sapped market confidence.

The meteoric rise in gold prices reflects this panic. Bitcoin is benefitting from this fear too because of its Hard Cap quality. Moreover, Bitcoin is asserting its relative dominance in the crypto market.

But for prices to rally above $100,000 sustainably require, in my opinion, two elements:

• One, a revival in ‘animal spirits’.
• Two, some additional purchase from governmental agencies that herald the start of portfolio anchoring with BTCs. So far, we have not seen any central banks doing this. But who knows, when one central bank does it, it could spark a rush into BTCs.

In conclusion, Bitcoin’s relative performance is becoming glaring by the day. This is quite a reversal of price action: Gold is now rallying like a red-hot Bitcoin while Bitcoin is as stable as last year’s gold. $100,000 is not too far away and that level might be tested again this year.(One US ETF that holds Bitcoin is the iShares Bitcoin, ticker IBIT).