Bitcoin Stagnates at $100,000 Due to LTH Selling Pressure

Charles Edwards, CEO of Capriole Investments, a cryptocurrency analysis company, has provided insights into the stagnation of Bitcoin's price around the $100,000 mark, despite significant interest from institutional investors. Edwards attributes this stagnation to selling pressure from long-term Bitcoin holders (LTHs) who have been liquidating their positions since the launch of the spot ETF in January 2024. This selling pressure has counteracted the bullish sentiment and prevented Bitcoin from reaching new highs.

Edwards recalled a prediction he made in April, stating that companies holding Bitcoin treasury would create a “flywheel” effect, triggering a massive buying wave in the market. This effect is now visible, with many new companies joining the trend. However, the CEO noted that the real reason for Bitcoin's stagnation is the sales by LTHs, which have been reflected in various media reports.

Examining on-chain data, Edwards observed a significant increase in the number of investors holding BTC for more than six months in the last two months. These purchases have more than covered all the BTC sold by LTHs in the last 1.5 years, a situation Edwards described as “incredible.” Such aggressive increases are usually followed by price squeezes, which is a short-term bullish sign. However, Edwards noted some weakness in the general on-chain data and suggested that recovery is possible if the buying momentum continues.

Edwards also highlighted the potential for a continued rapid pace of buying by treasury companies, stating that this cycle is just beginning. If aggressive buying by investors with a six-month holding period continues, the market could overcome the current weakness. The analyst's forecast suggests that Bitcoin could hit $300,000 or more in the final wave of a powerful Elliott Wave cycle, based on the parabolic pattern that Bitcoin has been following. However, it is important to note that this is a forecast and not a guarantee of future performance.

Despite the bullish technical indicators, such as the 50-day Simple Moving Average (SMA) support and the rising Relative Strength Index (RSI), Bitcoin faces significant resistance at $109,650. The Time Price Opportunity (TPO) chart for Bitcoin highlights several critical levels to watch, including the naked Point of Control (nPOC) at $109,650 as the primary resistance and buy tails at $104,347 and $103,463 as support levels. The failure to produce a lower low during the ongoing consolidation suggests that Bitcoin could revisit the nPOC at $109,650. The daily Bitcoin price chart further supports this optimism, with the 50-day SMA at $105,844 preventing a breakdown and the Awesome Oscillator (AO) indicating a shift in momentum favoring bulls.

However, there are concerns about a potential correction. A breakdown below the $100,000 psychological level could trigger panic selling, leading to a swift correction to $96,852 or even $90,000. These levels served as a base that propelled Bitcoin's price up by nearly 20% to $112,000, and a revisit to these levels could provide short-term relief for investors. However, a dire scenario could see the Bitcoin price revisit $90,000, where an unfilled buy-side imbalance is present, reaching up to $87,000.

In conclusion, while Bitcoin faces selling pressure and technical resistance, the overall market sentiment remains bullish. The rising correlation with the S&P 500 and positive technical indicators suggest that Bitcoin could soon retest its all-time high. However, investors should remain cautious, as a breakdown below $100,000 could trigger a correction and lead to a swift decline in price.