Key Points
- The ongoing consolidation of Bitcoin’s price may be influenced by long-term holders taking profits.
- An ascending bullish pattern on BTC’s chart could trigger a new bull rally.
Bitcoin’s [BTC] momentum continues to be low as it consolidates around the $96k mark. The latest analysis suggests that this could be due to long-term holders taking profits.
Long-Term Holders’ Influence on Bitcoin’s Price
After reaching $97k on December 2nd, the price of Bitcoin fell to $94k. However, it gained slight bullish momentum and crossed $96k again. This price movement indicates a consolidation phase, as it didn’t meet investors’ expectations of reaching $100k.
Data analytics platform, Alphractal, highlighted how the actions of long-term holders might be affecting BTC’s price. According to them, these holders have distributed a significant amount of BTC at a profit, leading to increased short-term selling pressure. This is evident in the Long Term Holders SOPR indicator.
Since late 2023, the addresses of these holders have been extremely profitable, as per the Long Term Holders NUPL Heatmap. This suggests that these holders might continue to take profits, potentially causing further selling pressure. This could be a reason behind BTC’s price consolidation.
Potential Future Trends for BTC
The analysis suggests continued profit taking, which could restrict BTC from moving up. However, data from Glassnode shows that BTC’s seller exhaustion constant has started to decline after peaking. In the past, this drop has often been followed by slight price upticks.
The Pi Cycle Top indicator suggests that BTC has a market top of over $124k. So, if profit taking decreases and buying pressure increases, it’s not too far-fetched to expect BTC to touch $100k in the coming weeks.
Moreover, BTC’s price appears to be moving within a bullish ascending triangle pattern. A successful breakout above this mark could trigger a fresh bull rally. The chances of this happening are decent, as the Relative Strength Index (RSI) shows an uptick, indicating rising buying pressure.