There has been a historic turning point in the world of cryptocurrencies. The world’s largest digital currency, Bitcoin, has crossed the psychologically and technically important level of $100,000. This unexpected boom has given tremendous profits to investors — according to the data, about 97% of bitcoin holders are now in a position of profit.
But with every boom comes a question: is this growth sustainable or is the market now moving towards selling pressure?
Table of Contents
- Is This Growth Sustainable?
- Institutional Investment Driving the Rally
- Technical Indicators Analysis
- Long-Term Holders’ Behavior
- Bitcoin Price Prediction: $120,000 Next Target?
- Conclusion
Happy but also cautious among investors
According to IntoTheBlock, about 97% of wallets are in profit at the current price of bitcoin. This is a matter of joy for investors, but it is also a cautionary sign for technical analysts. When such a large number of people are in profit, naturally they try to book some profit, which can create selling pressure in the market.
According to experts, the biggest challenge at this stage will be whether Bitcoin will be able to keep itself stable above $100,000 or not. If the price does not remain stable at this level, its next strong support is believed to be around $92,000.
Institutional investment gave strength
Institutional investors have contributed more than retail investors behind this historic rally of Bitcoin. Recently, large financial institutions like ARK, Fidelity and BlackRock have invested heavily in Bitcoin ETFs. According to data from CoinShares, $142.3 million was invested in these ETFs in just one day. BlackRock alone bought about 86 BTC ($8.4 million).
This is a sign that traditional financial institutions are no longer looking at the crypto market as just an “alternative” asset, but as a long-term investment.
Join The Quantitative Elite Community here: The Quantitative Elite on Skool
What do technical indicators say?
Bitcoin’s recent rally is giving a mixed response on the test of technical indicators. Metrics like the Relative Strength Index (RSI) are showing that the price is in an overbought condition, indicating a potential correction.
According to data from Coinglass, more than $279 million worth of positions were liquidated in just 24 hours, of which $243.3 million belonged to short sellers (who were expecting the price to fall). This proves that there is no clarity about the direction of the market.
Behavior of long-term holders
HODLers, i.e. investors who hold Bitcoin for a long time, are now standing at a crossroads amid this rally. Some HODLers are moving their old stash, which may indicate that they are now preparing to book profits.
However, Glassnode and other on-chain analysis platforms are showing that even now about 75% of the circulating supply of Bitcoin has not moved in the last six months. This means that a large number of investors are still in the market with a long-term view.
Could $120,000 be the next target?
Crypto analysts believe that if Bitcoin remains stable above $100K for a few weeks and decisively crosses the $98K resistance zone, the next target could be $120,000.
However, this will be possible only if there is no negative economic or regulatory news in the market. The monetary policy of the US Federal Reserve, the trend of interest rates, and the global geopolitical situation — all these factors can influence the further movement of Bitcoin.
Conclusion: Excitement and risk both together
Bitcoin’s jump above $100,000 has proved that the crypto market is now moving towards maturity. Institutional investments, regulatory approvals (such as spot ETFs) and the acceptance of Bitcoin globally are underpinning this growth.
But it is also true that the price can go down at the same speed as it has risen if a sell-off begins. In such a situation, it is important for investors not to take hasty decisions and invest keeping in mind technical and on-chain indicators.
The next few weeks could be decisive for Bitcoin – either it will stabilize above $100K, opening the way to new highs, or it may see a slight decline due to profit booking.
Grab your copy of Practical Python for Effective Algorithmic Trading here: Amazon – Practical Python for Effective Algorithmic Trading