A leading cryptocurrency analyst, Charles Edwards has shed light on possible reasons Bitcoin (BTC) is yet to reach the anticipated $100,000 mark. The broader market sentiment anticipated a bullish run for Bitcoin post-halving despite cautions by industry stakeholders to retail investors to restrain their expectations.
Bitcoin Long-Term Holders and Market Dynamics
Although BTC price attained an all-time high of $73,000 in March, the digital asset is yet to break that record again.
As per Edwards’ analysis, the limiting factors include the price battle against long-term holders who are selling their digital assets. Notable Hodlers, that is, those who have held Bitcoin for two years or more, have seen their share of the total supply drop from a high of 57% in December 2023 to 54% today.
Why aren’t we at $100,000 yet?
US Bitcoin ETFs have acquired 200% of the Bitcoin mined since launch in mid-January.
At $71K, Bitcoin is up 50% since the ETFs launched, but many are asking why not more? pic.twitter.com/v86Aagvys4
— Charles Edwards (@caprioleio) June 7, 2024
Although this 3% drop might seem minor, it equates to about 630,000 Bitcoin, or roughly 300% of the total amount purchased by all US spot Bitcoin ETFs this year. Meanwhile, available data reveals that US Bitcoin ETFs have purchased 200% of the BTC mined since their launch in mid-January.
Generally, in the crypto space, selling positions are maintained while anticipating price increases. Hence, Edwards believes that much of the Bitcoin now sold is likely shifting from Grayscale’s ETF to the new ETFs, which is exaggerating the decline.
Impact of Halving and USD Liquidity
Besides the long-term holders, Edwards is convinced that the effects of the halving that took place in April is yet to impact on price performance. He hinges on the time lag that institutional investors need to review, approve, and allocate assets which might span a quarter.
The crypto analyst predicts that in time, with Bitcoin issuance down 50% already, there will be a widening of the gap between Bitcoin mined and ETF depletion. This implies that significant ETF inflows are probably still ahead.
Another notable consideration is the USD liquidity which has been flat or slightly negative since Bitcoin peaked in March. The liquidity level has remained on a steady decline since 2021 and only started reversing its dip early this year, though at a slow pace. Usually, when liquidity dries up, risk assets face an uphill battle.
Hence, for the coin to hit the $100,000 mark, the market has to witness an increase in USD liquidity. Some notable predictions for bullish Bitcoin price came from renowned author, Robert Kiyosaki. Kiyosaki said the coin might jump to $350,000 by August.
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