In a recent report titled “Bitcoin’s Path to $100K – Dismantling the Barriers,” Alex Thorn, who heads Firmwide Research at Galaxy Digital, delves into Bitcoin’s recent price volatility and the factors that could propel it toward the coveted $100,000 milestone.
Recent Price Trends
Over the past week, Bitcoin has consistently traded above $90,000, sparking excitement among investors that a breakthrough above $100,000 is imminent.
Since November 4, right before the U.S. elections, the cryptocurrency has appreciated by nearly 50%.
On November 24, it reached its all-time high of $99,860 before a slight correction brought the price down by about 8%, settling at around $91,420.
Historically, Bitcoin enthusiasts have taken price corrections in stride, having grown accustomed to its dramatic fluctuations in earlier market phases.
However, Thorn suggests the current landscape is different; many investors have not experienced significant volatility in recent years, and they are currently scrutinizing market movements closely.
Thorn emphasizes the importance of price corrections in market cycles, arguing that bullish trends often unfold amidst prevailing uncertainties.
He cited the period from March 14, 2024, when Bitcoin hit $73,835, to November 6, 2024, which featured an extended decline lasting 237 days—one of the largest bull flags he has encountered.
Market Dynamics and Selling Pressures
Analysis of Bitcoin’s historical data reveals that significant downturns have frequently occurred during bear markets, with notable declines seen in 2012, 2015-2016, and 2019—where drops exceeded 80%.
Furthermore, declines of approximately 75% were recorded following the March 2020 crash and again during the late 2022 to early 2023 period.
Yet the recent 8% price drop appears quite mild compared to the significant turbulence observed during the aforementioned 237-day span.
Thorn’s scrutiny of on-chain data focused on current selling pressures and Bitcoin’s supply distribution.
He noticed a decline in the share of coins held by long-term holders—those holding their assets for over 155 days—correlating with the rise in Bitcoin’s price after the elections.
This decrease is more pronounced than previous profit-taking phases leading up to all-time highs.
Interestingly, the Coin Days Destroyed (CDD) metric, which measures the movement of older coins, has not surged significantly, suggesting that older coins aren’t being offloaded as they typically are during market peaks.
Thorn raised an intriguing point about the nature of current selling activities, suggesting they are largely driven by recent long-term holders who bought during the last consolidation phase.
The UTXO Realized Price Distribution (URPD) indicates substantial ownership in coins transferred between $52,000 and $72,000, signaling these investors might be cashing in as Bitcoin approaches the significant $100,000 threshold.
Future Prospects and Catalysts
Turning to the options market, Thorn noted that new open interest in spot Bitcoin ETFs has reached over $4.1 billion, with call options accounting for around $3.1 billion.
The substantial interest in call options, particularly for strike prices of $93,000 and beyond, serves as a bullish indicator, revealing that traders are positioning themselves for a potential upward trend.
Thorn also considered the level of leverage in the market.
While some leverage exists, it is seen as controllable rather than excessive, with perpetual swap funding rates remaining below the heightened levels recorded during previous market peaks.
Although open interest has hit record highs, much of this activity is concentrated within the Chicago Mercantile Exchange (CME), likely due to ETF-related transactions.
Expressing a positive outlook for Bitcoin’s future, Thorn pointed to a mix of institutional interest, corporate adoption, and favorable regulatory shifts.
He identified several potential catalysts that could push Bitcoin’s price higher in the near future.
One notable possibility is the easing of regulatory constraints.
Thorn mentioned the potential for changes to the SEC’s Staff Accounting Bulletin 121 (SAB 121), which may allow major custody banks to enter the cryptocurrency arena.
Additionally, shifts within the Office of the Comptroller of the Currency (OCC) could pave the way for traditional banks to engage more with cryptocurrencies.
A reassessment of the SEC’s application of the Howey Test to digital assets or an expansion of the definitions surrounding “crypto asset securities” could further enable traditional financial institutions to participate in this evolving landscape.
This, in turn, could encourage the approval of more spot-based crypto ETFs in the U.S.
As the potential for further institutional involvement grows, Thorn predicts enhanced liquidity and accessibility in both Bitcoin and broader crypto markets, bridging traditional finance (TradFi) and decentralized finance (DeFi).
With favorable regulatory changes on the horizon, this merger appears increasingly imminent.
On the political front, Thorn highlighted the incoming U.S. administration’s supportive viewpoint towards Bitcoin.
Scott Bessent, a known champion of Bitcoin, is set to take on the role of the 79th Treasury Secretary, joined by Vice President-elect J.D. Vance, who has personal investments in Bitcoin, along with other prominent proponents of the digital currency.
Reports indicate that the Trump transition team envisions the Commodity Futures Trading Commission (CFTC) as the leading authority for digital asset regulation, rather than the Securities and Exchange Commission (SEC), a move that has garnered positive feedback from industry experts.
Thorn also mentioned the growing conversations around creating a U.S. Bitcoin strategic reserve, an initiative that could encourage other nations to adopt more progressive digital asset policies or establish their reserves.
For instance, Morocco is revisiting its stance on cryptocurrency legislation, moving toward legalization after imposing a ban in 2017.
Key upcoming events, such as the Bitcoin MENA conference in Abu Dhabi on December 9 and 10, could pave the way for significant advancements in crypto adoption.
The expected rollout of spot ETF options promises to enhance liquidity and lower volatility, fostering greater institutional participation and potentially capturing the interest of U.S. retail investors, who currently account for approximately 44% of the retail equity options market.
In conclusion, Thorn expressed optimism about the current environment for Bitcoin over the next year or two.
He believes the conditions are ripe for Bitcoin to solidify support and make another compelling attempt to exceed the $100,000 mark in the near future.
As per the latest figures, Bitcoin was trading at approximately $94,947.
Source: Bitcoinist
