Bitcoin ‘Well-Positioned’ To Break $100,000 Barrier Despite Short-Term Volatility: Report

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As an analyst with over two decades of experience in the financial markets, I’ve seen my fair share of bull runs and bear markets. The current Bitcoin (BTC) surge has caught my attention, especially considering the psychological barrier it is about to break – $100,000.

Based on a recent Bitfinex report, whether Bitcoin (BTC) surpasses the significant $100,000 mark will largely hinge on the behaviors of two crucial groups: long-term investors (LTI) who may choose to cash out for profits and short-term investors (STI) who could boost demand.

Short-Term Holder Demand Critical To Propel Bitcoin To $100,000

In simple terms, Bitcoin’s value skyrocketed by an impressive 37.3% in November, ending the month at a historic high of $96,506. To reach the $100,000 milestone, the demand from large-time holders (LTHs) needs to match the supply offered by long-term holders (STHs).

Historically, December has often been a turbulent month for Bitcoin. Yet, in years when Bitcoin undergoes its halving event, this month usually provides robust returns, averaging at 38.86%. Given that the latest halving took place in April 2024, analysts speculate that December might bring good fortune to Bitcoin holders.

In simpler terms, the most recent ‘Bitfinex Alpha’ analysis points out various reasons supporting Bitcoin’s potential rise above $100,000. The report acknowledges that there might be temporary price fluctuations, but the overall positive trend in the cryptocurrency market indicates further growth is likely to occur.

As an analyst, I’ve noted from my findings that temporary declines in Bitcoin price, such as the recent dip we saw last week down to $90,911, can frequently be attributed to ETF redemptions and Large Holder (LTH) profit-taking. This is based on the insights gathered from the report I’ve been studying.

Over the past week, Exchange-Traded Funds (ETFs) experienced a total withdrawal of approximately $135.1 million, with most of this happening during the initial two trading days. Large Bitcoin Holders (LTHs) have offloaded about 508,990 BTC since September, thereby increasing the available supply in the market.

While the 508,990 BTC distributed by LTHs since September is notable, it remains lower than the 934,000 BTC distributed before the March 2024 highs. Nonetheless, consistent demand from ETFs and retail buyers will prevent further price pullbacks.

According to the graph you’re looking at, the amount of Bitcoin held by STH (Strong Hands) is nearly at its peak of 3,282,000 BTC during this cycle. Historically, a bull market’s final phase kicks off when the STH supply exceeds the previous high set before the halving event. In simpler terms, this report suggests that we might be entering the final stage of a bull run now because the amount of Bitcoin held by strong investors is approaching its all-time high from the last cycle.

This change suggests growing involvement from retailers, yet it also underscores the market’s need for new demand to offset selling pressure from long-term holders.

For beginners, STH (Short-Term Holder) Supply generally represents the total Bitcoin stored by wallets or entities who have recently obtained it, usually within a timeframe of around 155 days. Conversely, LTH (Long-Term Holder) Supply pertains to the Bitcoin that was acquired more than 155 days in the past.

Analysts Confident $100,000 BTC Is Within Reach

Despite Bitcoin’s current fluctuations around the $90,000 mark, many well-known analysts are confident that surpassing $100,000 is merely a small challenge in Bitcoin’s projected price rise. For example, Cryptoquant anticipates that the peak for this cycle could reach as high as $146,000.

In a similar vein, the investment management company VanEck predicts that Bitcoin could reach up to $180,000 during this cycle. Currently, Bitcoin is valued at $95,238, representing a decrease of 1.2% over the past day.

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2024-12-04 12:12