A recent analysis from Galaxy Digital’s research head, Alex Thorn, explores Bitcoin’s potential to break through the $100,000 barrier. He thinks it’s likely, and here’s why.
Bitcoin’s Recent Run and Corrections
Bitcoin’s price has been on a tear, rising about 50% since before the US election. It briefly touched almost $100,000 before a small dip of around 8%. While this might seem alarming to some newcomers, Thorn points out that corrections are normal, especially in bull markets. He even says bull markets often climb a “wall of worry.”
He highlights a significant period between March and November 2024, where Bitcoin traded sideways for 237 days – forming what he calls a massive “bull flag.” This is important because it shows the market’s resilience even during extended periods of consolidation. Past Bitcoin bear markets have seen much steeper drops (over 75% in some cases), so the recent dip is relatively minor in comparison.
Who’s Selling? Unpacking the On-Chain Data
Thorn delves into on-chain data to understand who’s selling. Interestingly, long-term holders (those holding for 155+ days) haven’t been dumping their coins en masse. The data suggests that the selling pressure is coming mostly from those who bought Bitcoin during the long period of sideways trading earlier in the year. These holders are likely taking profits as the price approaches $100,000.
The options market is also showing bullish signals, with billions of dollars in call options (bets that the price will go up) indicating strong investor confidence.
Is the Market Overly Leveraged?
Thorn doesn’t see excessive leverage in the market, a factor that could trigger a crash. Key indicators like funding rates and basis are not at alarming levels. While open interest (the total number of outstanding contracts) is high, a large portion is attributed to institutional investors hedging their positions.
Catalysts for a Bitcoin Surge
Several factors could push Bitcoin past $100,000:
- Regulatory Changes: Easing regulations, especially around how banks can interact with crypto, could bring major financial institutions into the market, boosting liquidity and driving up prices.
- Political Winds: The incoming US administration appears pro-Bitcoin, with several key figures holding the cryptocurrency. There’s even talk of a potential US Bitcoin reserve, which could influence other countries to follow suit.
- Spot ETFs: The approval of spot Bitcoin ETFs in the US would likely increase liquidity and attract more institutional investors.
The Outlook: Bullish
Thorn concludes that the outlook for Bitcoin over the next 12-24 months is extremely positive. He believes Bitcoin has a solid support base and could easily surpass $100,000 soon. At the time of writing, Bitcoin was trading around $94,947.
