Will BTC first reach $100K or crash to $88K? (analysis)

Bitcoin's recent explosive price action has led to massive profit-taking among long-term holders (LTHs).

According to a review by Glassnode, LTHs achieved a daily profit of $2.02 billion, ending the record in March 2024 and setting a new all-time high (ATH).

Long-term owners will maximize distributions

According to a report by Blockchain Intelligence Platform, long-term BTC holders have distributed 507,000 coins since September, marking a significant release from a previously dormant supply.

While the amount is less than the 934,000 BTC sold when the cryptocurrency surged earlier in the year, it still represents a more aggressive approach. On average, 0.27% of the total LTH supply is distributed daily, a level that has only been surpassed 177 times in Bitcoin's entire trading history.

Glassnode believes this move is critical to price discovery, as it reintroduces a large amount of supply into liquid circulation. In the past, periods of such high profitability have coincided with strong cash flow needs, a key component of sustaining upward momentum.

A closer look at distribution patterns revealed that coins with maturities of six months to one year were behind most of the sell-side pressure. This group accounted for at least 35% of total revenue, which amounted to $12.6 billion.

According to Glassnode's analysis, the coins are most favored in 2023, and reflect a swing trading approach by investors who took advantage of the momentum created by the launch of spot Bitcoin exchange-traded funds (ETFs) in January.

In contrast, those who have held their coins for more than a year are more conservative with their spending, suggesting that more seasoned heads are optimistic about BTC's long-term prospects.

An “air gap” provision below $88K raises correction concerns.

Bitcoin's recent run took it within touching distance of the $100,000 mark. It rose to $99,645 before shedding more than $6,000 as short holders (STHs) took profits.

Currently, it is changing hands above $96,000, while Glassnode data highlights the risk zone below $88,000, where minimal trading occurred during the last rally.

Glassnode This so-called “air gap” in the supply distribution can indicate a vulnerable price area, especially if demand weakens or profiteering increases.

Given the rise, correction and consolidation cycles of BTC's historical price discovery process, the lack of significant trading in the $88,000 region suggests that a pullback to strong support is needed before the coin can confidently break $100,000.

In addition, he pointed out that for the cryptocurrency to have a sustainable rise, the market must absorb the continuous sell-side pressure. However, if gains in LTHs increase, there is a supply glut in the market despite high demand, something Glassnode feels could weigh on the price in the short term.