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What’s Holding Bitcoin (BTC) Back From Surpassing $100,000? Insights from a Prominent Analyst
What’s Holding Bitcoin (BTC) Back From Surpassing $100,000? Insights from a Prominent Analyst on the Situation and Next Steps
Renowned cryptocurrency analyst Charles Edwards recently shed light on the reasons behind Bitcoin’s failure to break the $100,000 barrier.
Author:
Mete Demiralp
08.06.2024 – 07:35
Update:
6 seconds ago
0
During a recent discussion, cryptocurrency expert Charles Edwards delved into the factors preventing Bitcoin from reaching the coveted $100,000 milestone.
Edwards kicked off his analysis by emphasizing the significant impact of US Bitcoin ETFs. Since their launch in mid-January, these ETFs have absorbed a remarkable 200% of newly mined Bitcoins. Despite Bitcoin’s price surging by 50% to $71,000 post the ETFs’ introduction, many are puzzled by the lack of further growth.
One major challenge the market is facing, according to Edwards, is the selling off of long-term hodler wallets. The proportion of ‘Hodlers’ who have held Bitcoin for over 2 years in the total supply has dropped from an all-time high of 57% in December 2023 to 54% at present. While a 3% decline may not seem substantial, it translates to around 630k BTC, roughly 300% of the total purchased by all US Bitcoin ETFs this year.
Edwards pointed out that selling during price upticks is a typical trend observed in previous cycles. A significant portion of this selling is transitioning from Grayscale’s ETF to new ETFs, exacerbating the decline.
The analyst then touched upon the yet-to-be-seen impacts of the BTC halving. With daily BTC issuance halving in April, he anticipates a widening gap between ETF consumption and Bitcoin issuance next year. Additionally, he highlighted that institutions’ evaluation, approval, and allocation processes are ongoing, hinting at potential major ETF inflows in the future.
Another crucial factor Edwards highlighted is the seasonality of June, typically a period of market stagnation and risk aversion for many large asset managers.
According to Edwards, the most pivotal factor is the stagnant and slightly negative USD liquidity since Bitcoin’s peak in March. When liquidity dries up, risk assets face an uphill battle.
For a significant price surge, Edwards believes at least one of the following conditions should be met:
Increased average daily ETF purchases
Reduced selling of long-term wallets
Growth in US liquidity
Ending on an optimistic note, Edwards foresees these conditions materializing in the coming months, potentially paving the way for Bitcoin to breach the elusive $100,000 mark.
*This is not investment advice.
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