Key Points
- Bitcoin’s consolidation near the $96k mark may be influenced by long-term holders taking profits.
- Despite the profit-taking trend, bullish patterns and rising buying pressure suggest potential for a price increase.
Bitcoin’s Current Market Trends
Bitcoin [BTC] has been consolidating near the $96k mark, causing some speculation about the reasons behind this trend. After reaching $97k on December 2nd, Bitcoin’s price fell to $94k but managed to regain some momentum, crossing $96k once again. This movement suggests a consolidation phase, as Bitcoin is currently failing to meet investors’ expectations of reaching $100k.
Data analytics platform Alphractal suggested that long-term holders’ actions might be influencing BTC’s price. According to Alphractal, long-term holders have been selling a significant amount of BTC at a profit, which increases short-term selling pressure. This trend is reflected in the Long Term Holders SOPR indicator.
Long-Term Holders’ Influence on Bitcoin’s Price
Since late 2023, the addresses of long-term holders have continued to be at extremely profitable levels. This suggests that these holders might continue to take profits, potentially causing a further increase in selling pressure. If this is the case, it could be a contributing factor to BTC’s price consolidation. Previous cycles of Bitcoin have shown a similar trend.
Alphractal’s tweet stated, “It’s important to note that this distribution phase by Long-Term Holders can extend over several months, as observed in all previous cycles. This underscores their strategy of capitalizing on bullish cycles to move and realize profits from BTC held inactive for over 155 days.”
Future Predictions for Bitcoin
Despite the ongoing profit-taking trend, other data suggests the possibility of a price increase for Bitcoin. Glassnode’s data showed that BTC’s seller exhaustion constant began to decline after reaching a peak, often followed by slight price increases. The Pi Cycle Top indicator suggested that BTC has a market top of over $124k. If profit taking declines and buying pressure increases, it may not be unrealistic to expect Bitcoin to reach $100k in the coming weeks.
Furthermore, BTC’s price appears to be moving within a bullish ascending triangle pattern. A successful breakout above this mark could trigger a fresh bull rally. The chances of this happening are decent, as the Relative Strength Index (RSI) showed an increase, indicating rising buying pressure which could potentially push BTC’s price up.
