Emily Walker
A recent report from Bitfinex indicates that Bitcoin’s (BTC) ability to exceed the $100,000 mark is heavily influenced by two key groups of holders: long-term holders (LTH) who take profits and short-term holders (STH) who create demand.
Importance of Short-Term Holder Demand for Bitcoin’s Surge
In November, Bitcoin experienced a remarkable price increase of 37.3%, finishing the month at $96,506. However, to pass the $100,000 threshold, it is essential for STH demand to match the supply from LTHs.
Historically, December tends to be a volatile period for Bitcoin. Yet, years that have seen halving events often result in strong performance during this month, with average gains hovering around 38.86%. Following the most recent halving in April 2024, experts predict a positive outlook for BTC holders in December.
The new ‘Bitfinex Alpha’ report outlines various factors that could drive Bitcoin’s price above $100,000. It notes that while short-term price fluctuations are likely to continue, the current bullish trend in the cryptocurrency sector suggests more gains are on the horizon.
The report also highlights that brief price corrections, like the recent dip to $90,911, tend to stem from ETF outflows and LTHs selling their holdings. The report elaborates:
Recently, ETFs experienced net outflows of $135.1 million, primarily during the first two days of trading. Since September, LTHs have sold 508,990 BTC, increasing market supply.
Though the 508,990 BTC sold by LTHs since September is significant, it is still less than the 934,000 BTC sold before the earlier March 2024 peak. Nevertheless, steady demand from ETFs and retail investors will help limit additional price drops.
As illustrated in the chart above, the STH supply is approaching its cycle high of 3,282,000 BTC. Historical data suggests that the final stage of a bull market begins once STH supply exceeds pre-halving cycle highs. The report states:
This trend indicates greater participation from retail investors while demonstrating the market’s need for incoming demand to absorb profit-taking from LTHs.
To clarify, STH supply refers to the amount of BTC held by wallets or entities that acquired it within a short period, typically less than 155 days. In contrast, LTH supply pertains to BTC held for more than 155 days.
Analysts Optimistic About Reaching $100,000 BTC
Despite Bitcoin’s fluctuations in the mid-$90,000 range, many analysts believe that breaching the $100,000 barrier is just a minor challenge in BTC’s continual rise. Cryptoquant, for example, predicts the potential peak for this cycle could hit $146,000.
Likewise, investment management firm VanEck anticipates BTC may reach as high as $180,000 in this cycle. Currently, BTC is priced at $95,238, marking a 1.2% decrease over the past day.
