- Bitcoin’s $100K Climb: Are Traders Ignoring the Warning Signs?
Bitcoin’s meteoric rise toward the $100,000 milestone has been nothing short of exhilarating for crypto enthusiasts. Yet, a prominent crypto analyst is urging traders to approach the rally with caution. In a Dec. 8 post on X (formerly Twitter), CryptoQuant contributor Maartuun likened the current Bitcoin market to a game of “musical chairs,” warning traders to be ready when the music stops.
🚨Long-Term Holders sold 827,783 BTC in 30 days.
— Maartunn (@JA_Maartun) December 8, 2024
This is one of the bearish on-chain signals behind this BOLT statement.
A thread on more key signals behind this claim📉👇 https://t.co/C2M9CHM83c pic.twitter.com/NgIBf8i3Vm
Long-Term Holders Offloading Bitcoin
Since Nov. 8, long-term Bitcoin holders—wallets that have held BTC for at least 155 days—have sold over 827,783 BTC, valued at approximately $82.6 billion at current prices. This massive offload comes despite high-profile purchases such as Michael Saylor’s MicroStrategy acquiring 149,800 BTC and 84,193 BTC flowing into Bitcoin spot ETFs during the same period.
However, Maartuun notes that these acquisitions represent only 30% of the Bitcoin sold by long-term holders, indicating that sell pressure is far outpacing buy-side demand from institutional players.
Retail Demand Keeping Bitcoin Afloat
Despite the sell-off, Bitcoin has maintained its bullish trajectory, driven in part by retail demand hitting yearly highs. According to CryptoQuant’s 30-day retail demand chart, retail investors are not only buying Bitcoin but also engaging in futures trading. CoinGlass data shows Bitcoin’s Open Interest—a measure of unsettled derivatives contracts—stands at $61.2 billion, reflecting strong speculative interest.
Potential Warning Signs
While the rally continues, several metrics hint at a potential market top. Maartuun highlights the sell-side risk ratio and net taker volume as indicators suggesting that bullish momentum may soon falter.
Long-term Bitcoin holders are currently sitting on significant unrealized gains, with an average purchase price of $24,481, translating to a 400% return at Bitcoin’s current price of around $99,200. This massive profit margin may incentivize further selling, increasing downward pressure on the price.
Adding to the cautious outlook, Real Vision’s chief crypto analyst Jamie Coutts has flagged deteriorating liquidity conditions as a potential threat to Bitcoin’s rally. Coutts warns that while the euphoria surrounding Bitcoin’s new all-time highs is palpable, worsening liquidity could bring the rally to an abrupt end.
Final Thoughts
Bitcoin’s surge to $100,000 is undoubtedly historic, but traders are advised to tread carefully. With long-term holders cashing out and liquidity conditions tightening, the current rally may not sustain indefinitely. As Maartuun aptly put it, “Enjoy the ride, but be prepared when the music stops.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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