According to BlockBeats, on December 2, Bitfinex released a report stating that 'despite some brief turmoil last week, November was a peak month for Bitcoin. Bitcoin experienced its largest pullback since the U.S. elections, falling 8.64% within the week to $90,911, before quickly rebounding and setting a historic closing record at the end of the month, reaching $96,506. Bitcoin ended November with an impressive increase of 37.3%, making it the second-best-performing month of 2024 so far.
This outstanding performance continues to highlight Bitcoin's strong momentum, preparing us for December. Historically, December is usually a month of high volatility for Bitcoin, but during halving years, the average return for this asset is 38.86%. Given the current bull market dynamics, we believe Bitcoin is expected to continue rising, although it may experience short-term fluctuations. Any short-term pullbacks are likely to be triggered by ETF outflows and profit-taking by long-term holders. Last week, ETFs recorded a net outflow of $135.1 million, most of which occurred in the first two days of trading. Since September, long-term holders have distributed a significant amount of 508,990 Bitcoins, increasing the supply in the market. While this is still lower than the 934,000 Bitcoins distributed before the March 2024 peak, the ongoing selling pressure requires sustained demand from ETFs and marginal buyers to avoid further pullbacks.
Interestingly, the supply of short-term holders is close to its cyclical high of 3,282,000 Bitcoins. Historically, the final stage of a bull market typically occurs when the supply of short-term holders breaks above the pre-halving cycle high. This change indicates an increase in retail investor participation but also highlights the market's reliance on incoming demand to absorb the profit-taking from long-term holders.
As Bitcoin further enters the bull market cycle, the current consolidation phase is a necessary pause to absorb profit-taking and adjust market demand. With the recovery of ETF inflows and increased retail interest, we believe Bitcoin still has a solid foundation to break through the psychological barrier of $100,000.
