The post Bitcoin nears $100k: Can ETF demand counter sell-offs? appeared on BitcoinEthereumNews.com.

Bitcoin was trading at around $98,000 at press time. Sentiment around it remained positive. As Bitcoin [BTC] inches closer to the psychological $100,000 milestone, market participants are closely monitoring on-chain metrics to decipher the dynamics at play. While profit-taking activities by long-term holders (LTHs) are evident, the surge in demand from spot Bitcoin ETFs is balancing the equation. The interplay between these factors could determine the trajectory of BTC’s price in the short to medium term. Bitcoin’s long-term holder activity and profit-taking The behavior of LTHs is crucial in understanding Bitcoin’s market stability. Analysis of data from the Long-Term Holder Position Change chart indicated a notable uptick in distribution. Over the past few weeks, there has been a sharp decline in LTH net positions. The Glassnode chart showed significant profit-taking activities marking this phase. The shift from accumulation to distribution is common during bull markets, as LTHs capitalize on their long-term holdings. Source: Glassnode Adding context to this trend is the Long-Term Holder Spending Binary Indicator. The metric, which signals LTHs’ risk levels in terms of profit realization, currently reflects a “High Risk” zone at around 0.8. Historically, similar risk levels have coincided with local price peaks, suggesting caution for investors banking on a sustained rally beyond $100,000. Bitcoin ETF demand balances sell-offs Counterbalancing the sell-off by LTHs is the strong demand for Bitcoin ETFs. The Spot ETF Position Change chart highlights consistent inflows, with over 450,000 BTC allocated to ETFs over the past month. This influx underscored the appetite of institutional investors, who view ETFs as a simplified entry point into the crypto market. Source: Glassnode The ETF flows are playing a pivotal role in absorbing the selling pressure. In October, when LTH distribution intensified, ETF holdings saw their sharpest rise in months, indicating that demand from new participants…

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Filed under: News - @ November 23, 2024 4:25 pm