The road to Bitcoin reaching $100,000 is not easy, with its ups and downs. Many predict that reaching a high will require going through a period of decline. Bitcoin recently fell from nearly $100,000 to about $91,000, sparking debates among traders and analysts. However, according to Joe Consorti, growth director at Bitcoin custody firm Theya, this adjustment is normal. He believes it is a natural part of the price discovery process for Bitcoin.
That said, Bitcoin is approaching its historical highs, and just as it breaks the $100,000 barrier, psychological resistance plays a crucial role in causing price fluctuations.
Why corrections are expected
He explained that these pullbacks are common in the early stages of a Bitcoin bull market. Historically, this means that when Bitcoin crosses key milestones, it will face a series of corrections. This situation has occurred in previous runs, especially in 2021, when Bitcoin experienced a significant pullback after rising to $60,000.
The recent pullback (about 8.7% from the peak) is entirely consistent with this pattern. Long-term holders (LTH) — those holding Bitcoin for at least 155 days — are typically the ones profiting during these surges, which exacerbates market volatility.
In the past few weeks, long-term holders (LTH) have sold over 400,000 BTC, leading to a recent market decline. But another force is at play: institutional buyers. Bitcoin ETFs and companies like MicroStrategy have been scooping up hundreds of thousands of BTC, helping to offset the selling pressure from LTH.
Optimistic fundamentals
Moreover, Bitcoin's price is highly sensitive to global liquidity trends, particularly the M2 money supply. Analysts have noted that as global M2 contracts, Bitcoin tends to contract as well, which could lead to further pullbacks of up to 25%.
Nevertheless, supported by strong institutional buying, Bitcoin's resilience in the face of liquidity tightening suggests it may maintain its upward momentum, and there is a potential for significant growth once LTH completes their profit-taking.
The road ahead
As Bitcoin approaches the coveted $100,000 mark, Consorti urges investors not to focus solely on short-term price movements. The psychological significance of Bitcoin breaking $100,000 is profound, as it will transition from a speculative asset to a widely recognized store of value. While the road to $100,000 may be fraught with bumps and adjustments, Bitcoin's long-term potential remains strong, especially with increasing institutional support. Therefore, despite potential adjustments, Bitcoin's trajectory for the end of the year still points upward.
What strategy will you adopt to navigate this adjustment phase?
