Author: Brian McGleenon
Compiled by: Centreless
Abstract:
Bitfinex analysts say whether Bit coin can break through $100,000 depends on whether the increase in short-term demand can balance the profit-taking of long-term holders.
The head of research at Copper.co stated that the strong demand for spot Bit coin ETFs may be a key factor driving the rise in Bit coin prices.
Bitfinex analysts believe that the upward momentum of Bit coin depends on the balance between the demand of short-term holders (STH) and the supply of long-term holders (LTH).
Analysts say the supply of STH is approaching the cycle high of 3.28 million Bit coins, a level historically associated with the start of a bull market. "This indicates that retail interest is rising, but also highlights the urgency for new demand to absorb the profit-taking of long-term holders," the analyst said.
The increase in profit-taking by long-term holders has put pressure on the upward momentum of Bit coin, which may hinder the further rise of this market-leading digital asset.
They said: "Over the past two weeks, the supply of long-term holders entering the Bit coin market has remained stable, and the lack of spot demand to absorb this supply may lead to further price declines."
Bit coin breaking $100,000 is related to Bit coin ETF fund inflows
As crypto investors speculate that Bit coin may reach the $100,000 milestone, an analyst said the inflow of spot exchange-traded funds (ETFs) could be the catalyst to push the digital currency beyond that threshold.
Fadi Aboualfa, head of research at Copper.co, highlighted the potential impact of ETF-driven demand on Bit coin prices, and pointed to recent ETF inflow data as painting an optimistic picture, suggesting the $100,000 milestone may be within reach.
He said in an email: "For every 10,000 Bit coins added to ETF holdings, Bit coin prices have historically risen an average of 2.2%. Given that ETFs currently hold 1.08 million Bit coins, Bit coin ETF inflows of around $1.9 billion would be enough to buy an additional 20,000 Bit coins, and could potentially drive Bit coin prices above $100,000 within one to two weeks."
On Wednesday, the inflow of spot Bit coin ETFs remained strong, attracting a total of $676 million worth of digital assets. BRN analyst Valentin Fournier told The Block: "These large-scale inflows highlight the growing interest of institutional investors and indicate a solid support level."
Fournier predicted that Bit coin will benefit from these ongoing institutional capital inflows. "We expect Bit coin to benefit from the continued institutional capital inflows in the coming week and potentially attempt a breakout," Fournier said.
According to glassnode data, spot Bit coin ETFs set a new record in November. Over the past month, Bit coin ETFs have attracted $6.1 billion in inflows, with $5.4 billion flowing into BlackRock's IBIT fund.
Meanwhile, the Bit coin market faced some adverse factors this week, with reports that the U.S. government made a major adjustment to Bit coin. According to a post by Arkham on X on Tuesday, government authorities transferred about 19,800 Bit coins (worth $1.9 billion) to a Coinbase Prime wallet. These funds were seized as part of the "Silk Road" case.
Against the backdrop of increased ETF inflows, Bit coin's price has risen about 2% in the past 24 hours, currently trading above the $100,000 mark.
