Bitcoin to Maintain Upward Momentum and Break Through $100K If This Happens (Bitfinex) | BinanX News

With December historically being a volatile and choppy month for bitcoin (BTC), analysts at crypto exchange Bitfinex believe the digital asset could see a short-term pullback; However, a change in network dynamics could take it above $100,000.

According to a weekly reportBTC could maintain bullish momentum this month and surpass $100,000 if the demand from short-term (STH) holders can meet the supply from long-term (LTH) holders. At the time of writing, BTC was changing hands at $94,800, after a week of consolidation between $90,000 and $98,000.

Can GTS demand meet LTH supply?

Long-term Bitcoin holders have begun to capitalize on the increased demand for BTC in the market to distribute their supply on a large scale. Increased demand for BTC from institutional investors and the Bitcoin exchange-traded fund (ETF) spot market fueled the latest rally.

LTH supply recorded a peak in September and since then, this group of market participants has distributed approximately 508,990 BTC. While this figure represents significant volume, Bitfinex revealed that it is less than the 934,000 BTC LTH spent during the March rally, which led to bitcoin’s high of $73,666.

Over the past eight months, LTHs have re-accumulated after distributing their bitcoins before the halving. However, with the resumption of a redistribution phase among this group of investors, STHs have been buying and accumulating rapidly. According to Bitfinex analysis, a reduction in LTH supply is expected at this stage of the bull cycle.

BTC needs ETF inflows and strong demand

As LTHs continue to make gains, BTC needs positive ETF flows and strong demand from marginal buyers in the near term to maintain bullish momentum. This is because the supply entering the Bitcoin market from LTH has been flat for the past two weeks, and weak spot demand would fail to absorb the supply, resulting in a significant price correction.

It is worth mentioning that LTH’s Spent Production Profit Ratio (SOPR), which measures the profit margin at which this cohort of investors sells their BTC, indicates that the market is nowhere near the top. In previous cycles, this metric has shown LTH selling at an average 3.5x profit at market highs; however, at the time of writing, the average SOPR was around 2.6 times.

Furthermore, the final leg of the bull market begins when STH supply crosses the previous halving cycle high of 3,282,000 BTC; This figure currently stands at 3,252,000 BTC.