Bitcoin’s recent $90 billion pullback may seem significant, but it is actually minor when compared to the broader market flush happening in the current macro deleveraging cycle. Despite this dip, the next leg up for Bitcoin could arrive sooner than expected. In fact, the path to $100k for Bitcoin seems increasingly probable following a recent ‘trade dump.’
Since February 19th, the U.S. stock market has lost $11 trillion in market cap, with over half of that drawdown occurring post-‘Liberation Day.’ In a similar trend, Gold reached a Q2 peak before experiencing a retracement that erased $520 billion in market capitalization. Meanwhile, Bitcoin has only corrected by 5.17% from its all-time high of $1.74 trillion.
Long-term holders of Bitcoin have been accumulating more, showcasing strong conviction in the cryptocurrency. Short-term holders have seen a decline in supply, with many realizing losses as Bitcoin retraced from its peak. The Net Position Change metrics reveal aggressive accumulation by long-term holders at an average cost basis of $84k per BTC.
Despite Bitcoin being capped below $85k at the moment, the increasing decoupling from U.S. equities and the ongoing accumulation by long-term holders suggest a potential move towards reclaiming $100k. Capital is flowing out of risk assets and even safe havens like Gold, with multiple countries pulling back their gold reserves from foreign reserves.
To trigger FOMO and continue the bullish trend, Bitcoin must break resistance at $85k-$87k. Establishing a strong bid wall within this range is crucial for further price discovery. Whale cohorts holding over 1k BTC have been aggressively accumulating, reducing the likelihood of a retest of the $77k support level.
Bitcoin’s ability to remain strong amidst macro uncertainty reinforces its status as a hedge against market turbulence. The potential for increased capital inflows from governments, institutions, and retail investors further supports Bitcoin’s outlook for reaching six-figure price levels. As U.S. stocks face downside risks, Bitcoin’s haven status comes back into focus, making it an attractive asset for many investors.
