- Bitcoin Eyes $100K: Balancing Long-Term Profit-Taking and Short-Term Demand in December
Bitcoin’s journey toward the coveted $100,000 price point is poised for a critical test this December, as market dynamics signal heightened volatility. According to the latest Bitfinex Alpha report, the interplay between long-term holders (LTHs) cashing in profits and short-term holders (STHs) driving demand will shape Bitcoin’s trajectory in the coming weeks.
November Recap: Record Gains Amid Pullbacks
November closed on a high note for Bitcoin, with a record monthly price of $96,506 despite an 8.64% intra-week pullback. The cryptocurrency’s 37.3% gain for the month marked its second-best performance of 2024, underscoring strong market momentum. While Bitcoin dipped briefly to $90,911 on November 26, its resilience in bouncing back signals bullish sentiment as the year-end approaches.
Supply Trends: Profit-Taking by Long-Term Holders
A crucial factor influencing Bitcoin’s price is the supply dynamics of LTHs. Since the September peak in LTH supply, approximately 508,990 BTC has been distributed, reflecting a strategic move to capitalize on rising demand. However, this is still below the 934,000 BTC offloaded during the rally to March’s $73,666 high.
The Spent Output Profit Ratio (SOPR) for LTHs currently stands at 2.6, indicating continued profit-taking but not yet at the market-top levels seen historically when SOPR exceeds 3.
Short-Term Demand: A Key Driver
On the flip side, STH supply is nearing its cycle high of 3.28 million BTC. Historically, the final leg of Bitcoin’s bull market begins when STH supply surpasses pre-halving cycle highs. If STH demand can offset the ongoing LTH distributions, Bitcoin’s price could maintain its upward trajectory, potentially breaching the $100,000 mark.
December Outlook: Volatility on the Horizon
Bitfinex projects December as a pivotal month for Bitcoin, with heightened volatility expected due to the year’s most significant options expiry. While the momentum from November and Bitcoin’s halving-year historical trends favor continued growth, the market must navigate potential short-term fluctuations.
The report emphasizes the importance of demand from marginal buyers and STHs in absorbing LTH supply. If this balance tips positively, Bitcoin could achieve new all-time highs.
Conclusion: A Test of Market Strength
As December unfolds, traders and investors must stay vigilant. While the $100,000 milestone remains within reach, market dynamics — particularly the balance between LTH profit-taking and STH demand — will dictate Bitcoin’s next move. Amid expected volatility, the stage is set for a critical test of Bitcoin’s resilience and investor confidence in the cryptocurrency’s long-term potential.
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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