BTC Near $100K: Institutions Buy In, Yet Long-Term Holders Cash Out

• Bitcoin inches closer to $100,000 amid strong institutional demand.
• Experts warn that long-term holders selling into the rally could halt Bitcoin’s rise.
• The market faces risks of correction due to increased leverage and speculative trading.

Bitcoin has recently surged to near the $100,000 mark, sparking excitement among investors eager to see it break this key psychological barrier. After briefly touching a high of $99,600 last week, Bitcoin currently trades just under $96,150.

While the optimism surrounding Bitcoin’s price movement is palpable, some strategists remain cautious about whether the momentum can be sustained.

Institutional Demand Could Push Bitcoin Higher

Several experts remain optimistic, pointing to continued strong demand from institutional investors. Fred Thiel, CEO of Marathon Digital Holdings, believes that large-scale buyers are still aggressively purchasing Bitcoin.

“I think we’re going to see institutions continue to buy up Bitcoin,” Thiel said in an interview with CNBC. He noted that Marathon recently raised a $1 billion zero-coupon bond, similar to the $3 billion bond issued by MicroStrategy, partly used to fund a $100 million Bitcoin purchase.

With institutions like Marathon and MicroStrategy actively adding Bitcoin to their balance sheets, Thiel suggests that there is ample demand to drive prices higher in the short term. He predicts that while Bitcoin’s price may fluctuate, the overall trajectory will remain upward.

Challenges at the $100,000 Level

Despite the optimism, some experts caution that Bitcoin may face challenges at the $100,000 level. David Morrison, a senior market analyst at Trade Nation, pointed out that this price point has become a significant hurdle for further gains. “It feels as if it has become a high barrier for further price increases,” Morrison remarked.

He also warned that Bitcoin’s recent surge could inflate investor expectations, creating a false sense of security. George Milling-Stanley, chief gold strategist at State Street Global Advisors, shared this sentiment earlier this week, suggesting that Bitcoin is increasingly viewed as a speculative “return play,” attracting investors seeking capital gains rather than intrinsic value or utility in the cryptocurrency.

Factors Driving Price Fluctuations

One factor contributing to Bitcoin’s volatility is the behavior of long-term holders beginning to cash in on the asset’s unprecedented highs. According to Andre Dragosch, head of research at Bitwise Asset Management, long-term holders started selling significant amounts of Bitcoin during this rally. 

A recent report by analyst platform Glassnode revealed that long-term holders dumped over 500K BTC tokens as Bitcoin approached the $100K level this month. This increased supply in the market has tempered the upward price momentum.

Meanwhile, this month’s launch of options on spot Bitcoin exchange-traded funds (ETFs) intensified speculative activity. Many investors are using options to bet on Bitcoin’s price movements rather than buying Bitcoin directly, further fueling market volatility.

Mike Novogratz, CEO of Galaxy Digital, noted that the crypto market remains highly leveraged, which could increase the likelihood of a correction. However, he emphasized that such corrections are typically temporary and that Bitcoin’s long-term upward trend could continue if favorable conditions persist.