Bitcoin Price to Hit $110K or $90K Next?

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As a seasoned researcher who has witnessed the cryptocurrency market’s rollercoaster ride for years now, I can’t help but feel a sense of deja vu as I observe the current state of Bitcoin prices. The $100K level seems to be an insurmountable wall for BTC, and while institutional inflows are indeed impressive, they seem to be playing catch-up with the relentless selling from long-term holders.

Despite significant investments by institutions, the price of Bitcoin is struggling to surpass $100K as large-scale sellers among long-term holders persistently offload their BTC, even with heavy buying activity from companies like MicroStrategy and Bitcoin ETFs. Investors should remain vigilant about this ongoing trend.

Why Bitcoin Price Faces Rejection at $100K?

Ever since the significant surge in Bitcoin value following Donald Trump’s election win, those who have held Bitcoin for a long time have been selling their holdings at an increased rate. In the past month alone, this group has sold approximately 827,783 Bitcoins, creating a noticeable bearish trend in on-chain activity.

Meanwhile, significant institutions are persistently purchasing large amounts of Bitcoin through ETFs, with MicroStrategy buying 149,880 Bitcoin in the past month alone and a collective 84,193 Bitcoin flowing into spot Bitcoin ETFs. As noted by well-known crypto analyst Maartunn, these inflows are dwarfed by the total sell-off from long-term Bitcoin holders.

Over the past week, Bitcoin ETFs collectively drew investments amounting to approximately $2.73 billion, marking the highest weekly influx since their launch. Among these, the BlackRock Bitcoin ETF, IBIT, garnered inflows of around $2.6 billion, simultaneously surpassing a total asset under management (AUM) of $50 billion.

What ultimately caused Bitcoin’s price surge to an unprecedented $104K? Much like previous bull markets, it appears that the retail market and short-term investors are garnering most of the attention. Recent data shows that retail interest has peaked at yearly highs over the last month, hinting at heightened activity during a robust uptrend.

In simpler terms, many short-term investors (mostly retail) are taking up a large portion of the available supply. Moreover, Maartunn pointed out that retail involvement isn’t limited to just spot markets; in fact, the open interest for altcoins has reached $53.3 billion, while Bitcoin’s open interest is at $30.6 billion. This significant retail presence in both the spot and derivatives markets suggests a high-risk situation like a game of ‘musical chairs’, as the analyst cautions, so it’s important to be careful when market sentiments change.

Signs of Extreme Fear and Greed

Recently, the Crypto Fear & Greed Index spiked to 84, indicating an overwhelming sense of “intense optimism” or “extreme greed” among crypto investors. This degree of enthusiasm is typically linked with elevated risks and possible market peaks.

Besides the Fear & Greed Index, other indicators like the Sell-Side Risk Ratio and Net Taker Volume for Ethereum are signaling a potential market peak. These signs coincide with the bearish trends noticed in on-chain data during the recent price fluctuations.

As a crypto investor, I’m keeping a close eye on how the Bitcoin price might fluctuate in light of upcoming macroeconomic indicators. Specifically, I’m eagerly awaiting the U.S. Consumer Price Index (CPI) inflation figures, which could significantly impact the market. Furthermore, this week also brings the announcement of the U.S. Producer Price Index (PPI), a crucial inflation gauge that the Federal Reserve closely scrutinizes when deciding on interest rate adjustments. The movements in these indices could potentially shape my investment strategies.

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2024-12-09 09:20