As a seasoned crypto investor who has weathered numerous market cycles, I find myself cautiously optimistic about the current state of Bitcoin (BTC). The forecast for December being choppy and volatile is not uncharted territory for us veterans, but the potential for BTC to break past the $100,000 mark if short-term holder demand can meet long-term holder supply is indeed intriguing.
In December, Bitcoin has historically shown volatility and choppiness. Analysts from the cryptocurrency exchange Bitfinex anticipate a temporary dip in Bitcoin’s price, but changes in network dynamics might drive its value beyond $100,000.
As per recent reports, Bitcoin might continue to surge this month, potentially surpassing $100,000 if the demand from short-term investors matches the supply from long-term investors. Currently, Bitcoin is being traded at approximately $94,800, after a week of stabilization between $90,000 and $98,000.
Can STH Demand Meet LTH Supply?
Long-term Bitcoin holders are taking advantage of the growing demand for Bitcoin in the market by significantly dispersing their stored Bitcoin. This increased demand, fueled by institutional investors and the flourishing spot Bitcoin ETF market, has been a key factor driving the recent Bitcoin surge.
As an analyst, I’ve observed that the Long-Term Holders (LTH) in the market saw a peak supply in September. Since then, this specific group has dispersed approximately 508,990 Bitcoin into the market. While this quantity is substantial, Bitfinex disclosed that it falls short compared to the 934,000 BTC LTHs distributed during the March rally, which propelled bitcoin’s all-time high of $73,666.
Over the past eight months, Long-Term Holders (LTHs) have started to gather more bitcoins following their previous distribution before the halving. On the other hand, Short-Term Holders (STHs), due to a new phase of redistribution among them, have been quickly purchasing and accumulating bitcoins. According to Bitfinex’s assessment, it is anticipated that the supply held by Long-Term Holders will decrease at this stage in the bull market cycle.
BTC Needs ETF Inflows And Strong Demand
As Large-Scale Holders (LTHs) cash out their profits, Bitcoin requires robust inflows into ETFs and high demand from new buyers quickly to keep its bullish trend going. This is crucial because a consistent stream of LTH Bitcoin supply has been observed for the last fortnight, and if this isn’t met with strong spot demand, it could lead to a substantial price drop due to the excess supply not being adequately absorbed.
It’s important to note that the Long-Term Holder Spent Output Profit Ratio (SOPR), a metric indicating the average profit level at which these investors are selling their Bitcoin, suggests we’re not close to market peaks. Historically, LTHs have tended to sell at an average profit of about 3.5 times their initial investment during market tops; however, currently, the SOPR average is approximately 2.6 times, indicating lower profit margins.
As a crypto investor, I’m closely watching the supply of Stablecoins (STH) because history suggests that a new bull market’s final leg begins when this supply surpasses its previous high during the pre-halving cycle. Currently, we’re at approximately 3,252,000 BTC, just shy of the 3,282,000 BTC mark set before the last halving cycle. This could be a significant indicator for the upcoming market trends.
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2024-12-03 15:22