Why Is Bitcoin Stuck Below $100k?
Despite recent developments like Bitcoin ETFs, the highly anticipated surge to $100,000 remains elusive. Here’s why:
- Long-Term Holders Selling: Investors who have held Bitcoin for over two years are selling, reducing the supply and putting downward pressure on the price.
- Impact of Halving Not Yet Felt: The recent halving event, which reduced Bitcoin issuance by 50%, hasn’t fully impacted the market yet. As the supply decreases, the price is expected to rise.
- Financial Institutions Need Time to Adjust: Institutions need time to review and adjust their strategies to continue leading Bitcoin acquisitions.
Other Factors Influencing Bitcoin’s Price
- Increased Daily ETF Purchases:
More Bitcoin purchases by ETFs would drive up demand and prices.
- Reduced Selling by Long-Term Holders: If long-term holders stop selling, the supply would decrease, leading to higher prices.
- Expansion in U.S. Market Liquidity: Increased trading activity in the U.S. market would enhance liquidity and potentially boost prices.
Why ETF Inflows Haven’t Led to a Price Surge
- Complex Market Dynamics: The Bitcoin market is influenced by spot trading, futures, options, and ETFs. Focusing solely on ETFs doesn’t provide a complete picture.
- Existing Holders Selling: Some Bitcoin holders are selling their holdings, offsetting the buying pressure from ETFs.
- Whales Dominate the Market: Large holders control a significant portion of Bitcoin, and their trading activities can outweigh the impact of ETF buying.
