Analysts point out that, in addition to long-term holders starting to sell, there are more fundamental reasons blocking bitcoin from breaking through the $0.1 million mark.
Bitcoin approached the 0.1 million dollar mark this Monday but failed to break through this psychological barrier. On Tuesday, Bitcoin briefly fell to a low of 90,702.27 dollars, and by Friday, it had recovered to around 97,000 dollars, nearing 98,000 dollars.
Market analysis predicts that one reason for Bitcoin's decline is that investors began to take profits at high levels, leading to an increase in Bitcoin supply. Andre Dragosch, head of research at the crypto asset management company Bitwise in europe, wrote in a research report shared on Monday, "Long-term holders have started to sell off a significant amount of Bitcoin in the recent rally."
Some strategists are uncertain whether Bitcoin can gather enough momentum to reach the six-figure milestone. Besides the selling by long-term holders, they say there are more fundamental reasons.
David Morrison, senior market analyst at brokerage Trade Nation, stated that the 0.1 million dollar threshold "seems to have become a high barrier for further increases, or even an obstacle."
In fact, George Milling-Stanley, chief gold strategist at State Street Global Advisors, believes that Bitcoin's recent surge may have given investors a false sense of security. Milling-Stanley stated, "Simply put, Bitcoin is an investment seeking returns, which indicates that investors flock to Bitcoin for capital gains, rather than because they see value or utility in Bitcoin."
The options based on spot Bitcoin ETF launched last week may be related to this, as the options allow investors to bet on Bitcoin price fluctuations with less cash instead of buying Bitcoin itself.
In fact, long-term cryptos investors and Galaxy Digital CEO Mike Novogratz stated, "The leverage in the crypto world is generally too high, so a correction will occur."
That said, if former President Trump delivers on even a small fraction of his promises regarding the cryptos industry, then the price level of $0.1 million may not be a ceiling, but rather just another stepping stone in the celebratory rise of bitcoin.
This month, spot bitcoin ETFs issued by publishers such as blackrock and Fidelity Investments have attracted $6.2 billion in funding as of November, surpassing the previous peak of $6 billion reached in February when investors were excited about these products launched at the beginning of the year.
eToro market analyst Josh Gilbert stated, "Under the Trump administration, corporations and pension funds find it easier to hold these assets, so we will continue to see inflows into ETFs."
