The research director of Copper.co stated that the strong demand for spot Bitcoin ETFs may be a key factor driving the rise in Bitcoin prices.

Written by: Brian McGleenon

Translated by: Centreless

Summary:

• Analysts at Bitfinex indicate that whether Bitcoin can break through $100,000 depends on whether the increase in short-term demand can balance the profit-taking by long-term holders.

• The research director of Copper.co stated that the strong demand for spot Bitcoin ETFs may be a key factor driving the rise in Bitcoin prices.

Analysts at Bitfinex believe that the upward momentum of Bitcoin depends on the balance between the demand from short-term holders (STH) and the supply from long-term holders (LTH).

The analysts noted that the supply from STH is nearing a cycle high of 3.28 million Bitcoins, a level historically associated with the onset of bull market peaks. "This indicates that retail interest is rising, but it also highlights the urgent need for new demand to absorb the profit-taking from long-term holders," the analysts said.

The increase in profit-taking by long-term holders has put pressure on Bitcoin's upward momentum, potentially hindering further gains for this leading digital asset by market capitalization.

They stated, "Over the past two weeks, the supply entering the Bitcoin market from long-term holders has remained stable, and the lack of spot demand to absorb this supply may lead to further price declines."

Bitcoin's breakthrough of $100,000 is related to Bitcoin ETF inflows

As cryptocurrency investors speculate that Bitcoin may reach the $100,000 milestone, an analyst stated that inflows into spot exchange-traded funds (ETFs) could be the catalyst driving the digital currency past this threshold.

Fadi Aboualfa, the research director at Copper.co, emphasized the potential impact of ETF-driven demand on Bitcoin prices, noting that recent ETF inflow data paints an optimistic picture, suggesting that the $100,000 milestone may be within reach.

He stated in an email, "For every additional 10,000 Bitcoins in ETF holdings, Bitcoin's price has historically increased by an average of 2.2%. Considering that the current amount of Bitcoin held in ETFs is 1.08 million, the inflow of approximately $1.9 billion into Bitcoin ETFs would be sufficient to purchase an additional 20,000 Bitcoins and could potentially push Bitcoin's price above $100,000 within one to two weeks."

This Wednesday, inflows into spot Bitcoin ETFs remained strong, accumulating a total of $676 million in digital assets. BRN analyst Valentin Fournier told The Block, "These large-scale inflows highlight the growing interest from institutional investors and indicate a solid support level."

Fournier predicts that Bitcoin will benefit from these ongoing institutional inflows. "We expect Bitcoin to benefit from continued institutional inflows over the next week and potentially attempt to break through," Fournier said.

According to data from Glassnode, November saw record inflows into spot Bitcoin ETFs. Over the past month, Bitcoin ETFs attracted a total of $6.1 billion in inflows, with $5.4 billion going into BlackRock's IBIT fund.

Meanwhile, the Bitcoin market faced some adverse factors this week, with reports of significant adjustments by the U.S. government regarding Bitcoin. According to a post by Arkham on X on Tuesday, government authorities transferred approximately 19,800 Bitcoins (worth $1.9 billion) to a Coinbase Prime wallet. These funds were seized in connection with the "Silk Road" case.

Against the backdrop of increasing ETF inflows, Bitcoin's price has risen by about 2% in the past 24 hours, currently trading above the $100,000 mark.

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