VC Lists 2 Reasons Why Bitcoin is Still Trending Below $100,000

bitcoin traders are optimistic and confident that the bulls have more legs to push prices above $72,000 and all-time highs. While the enthusiasm for what lies ahead is primarily due to the massive influx into spot bitcoin exchange-traded funds (ETFs), Charles Edwards, founder of Capriole Investments, has singled out multiple factors that limit the current bullish trend to $100,000. .

Here's why bitcoin is still trading below $100,000

In a post on x, Edwards x.com/caprioleio/status/1798983708537733507″ target=”_blank” rel=”nofollow”>saying Several factors combine to suppress profits. However, most relate to a fight between new institutional money and a wave of selling by long-term holders.

Roughly six months after the US Securities and Exchange Commission (SEC) approved the first batch of spot bitcoin ETFs, billions continue to flow into these derivative products.

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According to Lookonchain, the nine btc ETF spot issuers in the United Statesx.com/lookonchain/status/1798730658971582808″ target=”_blank” rel=”nofollow”> aggregate 6,907 btc worth over $492 million on June 6. Fidelity added 3,104 btc, while BlackRock bought 2,186 btc.

Encouragingly, following the strong gains on May 20, institutions have been increasingly buying btc, gaining exposure through spot ETFs.

Over the past half year, Edwards notes that spot bitcoin ETF issuers in the United States have been accumulating aggressively. So far, they have purchased 200% of all btc mined since their debut in January.

What this means is that there is a steady and impressive stream of institutional investment flowing into bitcoin. btc prices have been trending higher in response to this development, surpassing 2021 highs and printing new all-time highs in March 2024.

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Although the upward trend is clear, the pace of expansion is discouraging. Edwards notes that more and more long-term holders are actively selling. Its share of the total supply has been declining from the peak of 57% in December 2023, falling to 54%, reducing 630,000 btc in the process. This figure dwarfs the total holdings of all btc accumulated by spot bitcoin ETF issuers in the United States.

Timely bitcoin ETF Inflows, Dollar Liquidity, and Long-Term Holder Behavior Are Key

In the midst of this wait, the founder believes that bitcoin could still overcome local resistance and reach $100,000. For this level to be tested, there must be an increase in institutional appetite for btc, even pushing daily purchases to over $1 billion.

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Additionally, long-term holders must slow their liquidation, which reduces supply. If this prints as the M2 money supply increases in the United States, the currency could exceed expectations, breaking out of the current range.

Featured image of DALLE, TradingView chart