Bitcoin Stubborn Stand Below $100K: What’s Holding It Back?

Bitcoin continues to be the market leader. Nevertheless, despite significant developments, reminiscent of the introduction of spot Bitcoin Exchange-Traded Funds (ETFs), the anticipated price surge to $100,000 stays ‘unrealized.’

Charles Edwards, founding father of Capriole Investments, commented on this and took to Elon Musk’s social media platform X to clarify the hurdles stopping Bitcoin from achieving this milestone.

Examining Bitcoin’s Stagnation Below $100k

In keeping with Edwards, one in all the first aspects is the sale of Bitcoin by long-term holders. His evaluation shows a decline in wallets holding Bitcoin for over two years, from an all-time high of 57% in December 2023 to 54%.

The expansion rate of Bitcoin holders. | Source: Charles Edwards on X

Although this 3% drop may appear minor, it represents about 630,000 BTC—far exceeding the amount purchased by US Bitcoin ETFs since January. This sell-off by long-standing investors is exerting downward pressure on the value.

Edwards also identified that the market has yet to completely feel the impact of Bitcoin’s halving event in April, which reduced the day by day issuance of Bitcoin by 50%.

We haven’t seen the impacts of the Halving yet.

With the day by day Bitcoin issuance dropping by 50% in April, we’ll likely see the delta between ETF consumption and Bitcoin mined widen quite a bit over the following yr. It also takes full quarters for institutions to review, sign-off and… pic.twitter.com/bAxfFzv6L8

— Charles Edwards (@caprioleio) June 7, 2024

He believes that the gap between the quantity of Bitcoin purchased by spot ETFs and the reduced output from mining will widen significantly, underscoring the necessity for financial institutions to regulate their strategies and proceed leading in Bitcoin acquisitions.

Meanwhile, Edwards identified three key aspects that he believes are essential for a pointy rise in Bitcoin’s price: increased day by day ETF purchases, reduced selling by long-term holders, and an expansion in U.S. market liquidity.

BTC Price Slow Amid Record ETF Inflows

Bitcoin trades at $71,926, showing modest movements because it struggles to mark any price increase over the past 24 hours, despite a 4.9% rise within the last 7 days.

BTC price is moving sideways on the 4-hour chart. Source: BTC/USDT on TradingView.com

While Charles Edwards has detailed reasons behind Bitcoin not reaching the $100,000 milestone, other experts are analyzing why substantial inflows into spot BTC ETFs haven’t translated right into a corresponding price surge.

Experts consider that various aspects muffle ETFs’ influence on Bitcoin’s price. Seasoned crypto trader Christopher Inks points out that a fancy interplay of spot trading, futures, options, and ETFs influences the Bitcoin market.

Inks stresses that an exclusive give attention to ETF activities doesn’t provide an entire view of the market dynamics. Responding to a user query on X in regards to the stagnant price despite ETF purchases, Inks remarked, “You do realize the market is made up of spot, futures, ETFs, and options, right? Price at any time limit is a product of all of those, not only one in all them..”

Further discussions amongst financial experts illuminate the multifaceted nature of the BTC market. Analyst Eric Balchunas suggests that the dearth of price movement despite ETF purchases may be on account of existing Bitcoin holders selling their holdings, which balances out the buying pressure from ETFs.

I’ve said it before and I’ll say it again, the decision is coming from contained in the house holmes. This is just not ETFs doing, obv bc they buying like crazy these days, it’s bitcoin holders selling or leveraged flushers or whatever. Repeatedly ETFs go on flow-a-thons and its met with… https://t.co/iuGNayrLgd

— Eric Balchunas (@EricBalchunas) June 6, 2024

One other expert, Jimie, explains that while ETFs contribute to market activity, they represent a small portion of the whole Bitcoin circulation.