Bitcoin’s (BTC) journey to a potential $100,000 price point will depend on the balance between short-term holder (STH) demand and long-term holder (LTH) profit-taking, according to the latest edition of the “Bitfinex Alpha” report.
Despite a sharp 8.64% intra-week pullback over the past few days, Bitcoin’s price surged to a record monthly close of $96,506 by the end of November.
The recovery came after Bitcoin dipped to $90,911 on Nov. 26, the largest decline since a pre-election sell-off in October. Despite the brief pullback, November saw Bitcoin gain 37.3%, the second-best monthly performance of the year.
Bitcoin’s strong momentum heading into December is seen as a positive signal. The report forecasted a continuation of the upward trend, particularly given BTC’s historical performance during halving years.
In the past, halving years have seen exceptional price growth, with Bitcoin typically seeing an average increase of 38.86%. However, the report also suggests that December may see heightened volatility, especially as it coincides with the most significant options expiry of the year.
Additionally, recent Bitcoin supply and demand trends suggest that the market could experience a temporary pullback before reaching new highs.
Supply trends
While the medium-term outlook for Bitcoin remains bullish, concerns about a short-term pullback persist. The report highlighted the sustained distribution of Bitcoin from long-term holders (LTHs) as a critical factor influencing price conditions.
Over the past two weeks, LTHs have capitalized on the increased demand by resuming large-scale distribution of their holdings. Since the peak in LTH supply in September, approximately 508,990 BTC has been distributed.
This distribution level, while substantial, is still smaller than the 934,000 BTC sold during the rally leading to the March high of $73,666. Yet, it remains a critical factor in the short-term outlook.
If the demand from short-term holders (STHs) and marginal buyers does not match the supply being offloaded by LTHs, Bitcoin could experience further price volatility and a deeper pullback before continuing its ascent.
STH supply is nearing its cycle high of 3,282,000 BTC, with just over 3.25 million BTC held by short-term buyers. Historically, the final leg of Bitcoin’s bull market is triggered when STH supply surpasses pre-halving cycle highs.
If STH demand can meet or exceed the supply from LTHs, Bitcoin could see continued upward momentum. The…
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