Insights from Galaxy Digital’s Alex Thorn on Bitcoin’s Approach to $100K
Overview:
In a recent research report titled “Bitcoin’s Path to $100K – Breaking Down This Barrier,” Alex Thorn, Galaxy Digital’s Head of Research, examines Bitcoin’s current market performance and the factors influencing its potential surge towards the $100,000 milestone. With Bitcoin maintaining levels above $90,000, the crypto community eagerly awaits a breakthrough.
Expert Analysis:
Thorn emphasizes the recent uptrend, highlighting a remarkable 50% surge in Bitcoin’s value since November 4, preceding the US elections. After hitting a peak of $99,860 on November 24, the price underwent a brief correction, dipping 8% to $91,420. Thorn observes that such pullbacks used to be commonplace in earlier Bitcoin eras but could unsettle newer investors less accustomed to such fluctuations. He stresses that corrections are normal in market cycles, stating, “Bull markets thrive amidst uncertainty.”
Market Insights:
Bitcoin has seen substantial bear markets historically, with declines exceeding 80% from previous highs in cycles like 2012, 2015-2016, and 2019. Thorn contrasts the current correction with the prolonged downtrend in Bitcoin from March to November 2024, lasting 237 days and forming one of the most intricate bull flag patterns he has observed.
Impact Evaluation:
Thorn’s examination of on-chain data uncovers a troubling trend: the stockpile held by long-term holders (LTH) – those holding assets for over 155 days – has decreased alongside rising prices, unlike earlier profit-taking periods before Bitcoin’s record highs. He raises a critical query: “If ‘long-term holder’ supply is dwindling and old coins remain static, who is offloading?” The evident selling pressure seems to stem from recent holders who bought during the lengthy consolidation period. Moreover, the options market indicates strong optimism with over $4.1 billion in fresh spot Bitcoin ETF options, mostly through call buying.
Thorn notes there is some leverage in the market but at healthy levels, highlighted by sound funding rates and growing open interest tied to the Chicago Mercantile Exchange. He places his confidence in the sustainability of the ongoing bull market on mounting institutional interest, favorable regulatory reforms, and the prospect of increased Bitcoin adoption across sectors.
Growth Catalysts:
Various catalysts could drive Bitcoin past $100,000. Expected regulatory shifts, such as SEC accounting regulation updates and enhanced treatment of digital assets, could encourage major banks to engage more actively with cryptocurrencies. Moreover, a potential regulatory oversight shift from the SEC to the Commodity Futures Trading Commission (CFTC) may foster greater acceptance of Bitcoin. Thorn underscores these developments as pivotal for boosting liquidity and institutional involvement in the crypto realm.
Political factors are also at play, with pro-Bitcoin figures likely to shape regulatory frameworks under the upcoming US administration. Thorn highlights potential interest from global entities, exemplified by Morocco’s recent reinstatement of legal crypto measures following a prior ban.
Summary:
Thorn’s in-depth analysis presents a compelling outlook for Bitcoin in the coming 12 to 24 months, indicating an imminent bullish phase. “The outlook for Bitcoin during this timeframe looks promising and bullish,” he concludes, suggesting that Bitcoin is set for a noteworthy challenge in surpassing the $100,000 threshold. As of the latest data, Bitcoin is valued at $94,947, laying the groundwork for prospective market shifts ahead.
