Bitcoin traders are optimistic, confident that the bulls have more legs to push prices above the all-time high of $72,000. While the excitement about what lies ahead is primarily due to the mass influx into Bitcoin exchange-traded funds (ETFs), Capriole Investments founder Charles Edwards has singled out multiple factors that determine the current upside at $100,000.
Here's why Bitcoin is still trading below $100,000
In a post on X, Edwards He said Several factors combine to suppress gains. However, most of it has to do with the struggle between new institutional money and a wave of selling by long-term bondholders.
Nearly 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, all nine issuers of BTC ETFs are based in the US He added 6,907 BTC worth over $492 million on June 6. Fidelity added 3,104 BTC, while BlackRock bought 2,186 BTC.
Encouragingly, after the sharp gains on May 20, institutions have increasingly been buying more Bitcoin, gaining exposure through spot ETFs.
Over the past half year or so, Edwards notes that U.S. Bitcoin ETF issuers have piled in aggressively. They have so far bought 200% of the total Bitcoin mined since their debut in January.
What this means is that there is a steady and impressive stream of institutional investment flowing into Bitcoin. Bitcoin prices are trending higher in response to this development, surpassing their 2021 highs and hitting all-time highs in March 2024.
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Although the upside is clear, the pace of expansion is not encouraging. Edwards points out that more and more long-term holders are actively selling. Its share of the total supply has shrunk since its December 2023 peak of 57%, falling to 54%, shedding 630,000 BTC in the process. This number dwarfs the total holdings of all BTC accumulated by U.S. Bitcoin ETF issuers.
Spot Bitcoin ETF flows, USD liquidity, and long-term shareholder behavior are key
Amid this wait, the founder believes that Bitcoin can still break through local resistance and rise to $100,000. For this level to be tested, there would need to be a significant rise in institutional appetite for Bitcoin, even pushing daily purchases above $1 billion.
In addition, holders of long-term bonds must slow their liquidation, which reduces supply. If this is printed as the US M2 money supply increases, the currency may exceed expectations, falling out of the current range.
Featured image from DALLE, chart from TradingView
