VC Lists 2 Reasons Why Bitcoin Is Still Trending Below $100,000
June 07 2024 - 11:30AM
NEWSBTC
Bitcoin traders are upbeat, confident that bulls have more legs to
push prices above $72,000 and all-time highs. While the excitement
about what lies ahead is primarily due to the mass inflow into spot
Bitcoin exchange-traded funds (ETFs), Charles Edwards, the founder
of Capriole Investments, has picked out multiple factors capping
the current uptrend to $100,000. Here’s Why Bitcoin Is Still
Trading Below $100,000 In a post on X, Edwards said several factors
combine to suppress gains. However, most relate to a tussle between
new institutional money and a wave of long-term holder selling.
Roughly six months after the first batch of spot Bitcoin ETFs were
approved by the United States Securities and Exchange Commission
(SEC), billions continue to flow to these derivative products.
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Classic Bullish Signal: Crypto Analyst According to Lookonchain,
all nine spot BTC ETF issuers in the United States added 6,907 BTC
worth over $492 million on June 6. Fidelity added 3,104 BTC, while
BlackRock bought 2,186 BTC. Encouragingly, following sharp gains on
May 20, institutions have been increasingly buying more BTC,
gaining exposure through spot ETFs. Over the past half year or so,
Edwards notes that spot Bitcoin ETF issuers in the United States
have been aggressively accumulating. So far, they have bought 200%
of all BTC mined since their debut in January. What this means is
that there is a steady and impressive stream of institutional
investment flowing to Bitcoin. BTC prices have been trending higher
in response to this development, breaking above 2021 highs and
printing fresh all-time highs in March 2024. Related Reading:
Crypto On Watch: Will ECB Rate Cut Fuel Bitcoin Rally? Though the
uptrend is clear, the pace of expansion is discouraging. Edwards
notes that more and more long-term holders are actively selling.
Their share of the total supply has been shrinking since the
December 2023 peak of 57%, falling to 54%, reducing 630,000 BTC in
the process. This figure dwarfs the total holdings of all BTC
accumulated by spot Bitcoin ETF issuers in the United States. Spot
Bitcoin ETF Inflows, USD Liquidity, And Long-term Holder Behavior
Are Key Amid this wait, the founder thinks Bitcoin could still
exceed local resistance and rally to $100,000. For this level to be
tested, there must be a spike in institutional appetite for BTC,
even pushing daily purchases to over $1 billion. Additionally,
long-term holders must slow down their liquidation, reducing
supply. If this prints out as the M2 money supply in the United
States increases, the coin could surpass expectations, breaking out
from the current range. Feature image from DALLE, chart from
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