Bitcoin recently came close to breaking the $100,000 price barrier last week, reaching a high of $99,645 before encountering resistance. According to CryptoQuant analyst Percival, psychological barriers like $100,000 are often points where traders exit positions for 'relative safety.'
Since climbing from $73,000 to $99,800, Percival noted that Bitcoin has recorded an increase of about 57%, listing it as one of the 'top six exits before consolidation.' Nevertheless, CryptoQuant analysts indicate that Bitcoin may enter a consolidation phase.
BTC faces resistance below $100: What does the future hold?
Percival emphasized the importance of the volatility index, which is a measure of market momentum. According to him, this index indicates that the upward momentum of Bitcoin is weakening week by week. This suggests that cryptocurrencies may consolidate for several weeks before another rebound begins.
In analyzing previous market cycles, especially 2020, Percival noted that the first correction after Bitcoin's consolidation lasted about three weeks and saw a price drop of 18%. If history repeats itself, the next rebound could occur in the second half of December.
The analyst also pointed out that the behavior of long-term holders (LTH) is a key factor in understanding the current market dynamics of Bitcoin. LTH currently holds profits of 350% and is in a supply distribution phase, with about 575,000 Bitcoins (worth approximately $58 billion) re-entering the market.
Nonetheless, demand remains strong, fueled by inflows into Bitcoin Exchange-Traded Funds (ETFs) and purchases from institutional participants like MicroStrategy.
Using the STH realized profit and loss metric, Percival further explored short-term holder (STH) activity. He noted that short-term holders account for 30.2% of the profits recorded during this phase.
Moreover, Bitcoin's market capitalization to realized value (MVRV) ratio has exceeded 1.33σ, indicating that the average token is approaching the 1.4σ area, equivalent to 40% unrealized profits. Historically, this area aligns with the first correction observed after significant rebounds at the end of 2020.
The next expectations for Bitcoin
Looking ahead, Bitcoin's trajectory could depend on several factors, including the speed of its consolidation phase and the behavior of institutional and retail investors.
If the current consolidation period reflects patterns from previous cycles, Bitcoin may stabilize before attempting to break through $100,000 again. However, short-term corrections may still occur, with LTH continuing to take profits and STH remaining active.
The cryptocurrency market has also seen strong demand from institutional participants, evidenced by significant inflows into ETFs. This indicates that despite short-term volatility, Bitcoin's long-term outlook remains promising.
At the time of writing, BTC is trading at $96,353, slightly up 0.3% in the past day, with a current market capitalization of $1.9 trillion.
