Bitcoin Price to Hit $110K or $90K Next?
The Bitcoin price is facing tough resistance and is unable to cross the $100K level despite institutional inflows. One factor that investors need to keep watch on is the long-term holders’ intensified BTC selling despite the massive buying coming from the likes of MicroStrategy and Bitcoin ETFs.
Why Bitcoin Price Faces Rejection at $100K?
Even since the mega Bitcoin rally triggered following the Donald Trump victory, long-term holders are heavily offloading their holdings. In the last 30 days, this cohort has offloaded 827,783 BTC thereby leaving a strong bearish signal in on-chain activity.
Source: Maartunn
On the other hand, institutional players have continued to buy aggressively with massive inflows into spot Bitcoin ETFs. As per popular crypto analyst Maartunn, MicroStrategy has purchased 149,880 BTC in the last 30 days while the total inflows into spot Bitcoin ETFs stand at 84,193 BTC. However, their combined inflows have been much smaller than the total sell-off by long-term holders.
Last week, spot Bitcoin ETFs netted inflows of $2.73 billion, reaching the highest-ever weekly inflows since inception. Of these, BlackRock Bitcoin ETF IBIT alone netted inflows of $2.6 billion, while crossing $50 billion AUM.
So what actually led to the Bitcoin price pump to an all-time high of $104K? Similar to the previous bull cycles, it’s the retail frenzy and shot-term holders that are capturing all the limelight. Recent data indicates that retail demand has surged to yearly highs over the past 30 days, reflecting increased activity during a strong upward trend.
Courtesy: Maartunn
Short-term holders, often dominated by retail investors, are absorbing much of the supply. Furthermore, Maartunn noted that retail participation extends beyond spot markets with the altcoin open interest surging to $53.3 billion while the Bitcoin open interest surging to $30.6 billion. This heavy retail presence in both spot and derivatives markets underscores a high-stakes “musical chairs” dynamic, noted the analyst while advising caution when market sentiment shifts.
Signs of Extreme Fear and Greed
The Crypto Fear & Greed Index has surged to 84, signaling “extreme greed” in the market—a level often associated with heightened risk and potential market tops.
Source: Maartunn
In addition to the Fear & Greed Index, other metrics, such as the Sell-Side Risk Ratio and Net Taker Volume (ETH), are also pointing toward the possibility of a market top. These signals align with bearish on-chain data observed during last week’s price movements.
Source: Maartunn
The Bitcoin price movement will depend on macro indicators with the release of U.S. Consumer Price Index (CPI) inflation figures. Adding to the spotlight, the U.S. Producer Price Index (PPI)—a key inflation gauge closely monitored by the Federal Reserve for rate-cut decisions—is also set to be announced this week.
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Filed under: News - @ December 9, 2024 6:16 am