As a seasoned crypto investor with a keen eye on market trends and fundamental analysis, I’m encouraged by the current bullish sentiment among Bitcoin traders. However, I remain cautiously optimistic about pushing prices above $100,000 due to several factors that Edwards, the founder of Capriole Investments, has highlighted.
As a crypto investor, I’m feeling optimistic about Bitcoin‘s future price action. Bulls seem determined to drive prices above $72,000 and set new all-time highs. The main reason for this confidence stems from the surge in investments pouring into spot Bitcoin exchange-traded funds (ETFs). However, according to Charles Edwards, founder of Capriole Investments, there are several factors that could limit the current uptrend, preventing it from reaching $100,000.
Here’s Why Bitcoin Is Still Trading Below $100,000
As an analyst, I would interpret Edwards’ post on X as follows: I observed that Edwards identified several elements contributing to the lack of significant price advancements in his discussion on X. Primarily, these factors revolve around the ongoing struggle between inflows of institutional investment and a surge in long-term holders selling their positions.
Approximately half a year after the SEC’s approval of the initial Bitcoin spot ETFs in the US, substantial amounts of money have been pouring into these investment vehicles.
As a crypto investor following the latest developments in the market, I’ve come across some interesting data from Lookonchain. On June 6th, nine Bitcoin Spot ETF issuers based in the United States collectively purchased approximately 6,907 BTC, which is equivalent to around $492 million. Among these, Fidelity acquired a substantial amount with 3,104 BTC under their belt. BlackRock followed suit by acquiring 2,186 BTC.
Institutions have shown a growing interest in Bitcoin since its price rise in late May. They have been actively purchasing the cryptocurrency and increasing their exposure through spot Bitcoin exchange-traded funds (ETFs).
For approximately the past six months, Edwards observes that U.S.-based Bitcoin ETF providers have been actively purchasing large quantities of Bitcoin. In total, they have acquired twice as much Bitcoin as has been mined and made available to the market since their launch in January.
Institutional investment in Bitcoin has been consistently pouring in, leading to a surge in its price. This development has caused BTC to surpass its previous highs from 2021 and set new record-breaking prices in March 2024.
As an analyst, I’ve observed a persistent upward trend in the market. However, the rate at which this expansion is occurring leaves much to be desired. Edwards has brought my attention to the fact that long-term holders have increasingly become sellers. Their portion of the overall supply has dwindled since the December 2023 peak, falling from a significant 57% to 54%. This represents a substantial reduction of approximately 630,000 BTC. Notably, this figure surpasses the total holdings accumulated by all Bitcoin spot ETF issuers in the United States.
Spot Bitcoin ETF Inflows, USD Liquidity, And Long-term Holder Behavior Are Key
As a researcher studying the cryptocurrency market, I believe that despite the current pause, Bitcoin could potentially surpass local resistance and reach new heights, specifically around the $100,000 mark. However, for this level to be tested, it is crucial that institutional interest in Bitcoin significantly increases. This surge in demand might even lead daily purchases to exceed one billion dollars.
As a researcher studying the cryptocurrency market, I would interpret this situation as follows: My observation is that those who have held a particular coin for an extended period are currently facing the need to reduce their holdings by selling. However, if the M2 money supply in the United States continues to expand at an accelerated rate, the demand for this coin could surge. This dynamic might lead to a shortage of available coins for sale and potentially push the price beyond current expectations, causing it to break out from its existing range.
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2024-06-07 18:40