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Slowing Down of Bitcoin's Sell-off at $130K-$150K: Prediction by Bitwise CEO

Bitcoin's CEO speculates that the sell-off may decelerate if the price exceeds $150K, as there's rising demand to secure loans using Bitcoin for liquidity purposes.

Bitcoin leader predicts possible slowdown in sell-off if price spikes beyond $150K, fueled by...
Bitcoin leader predicts possible slowdown in sell-off if price spikes beyond $150K, fueled by increasing demand for loans using digital gold as collateral.

Slowing Down of Bitcoin's Sell-off at $130K-$150K: Prediction by Bitwise CEO

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The massive sell-off in Bitcoin could eventually simmer down as large-time investors opt to borrow against their crypto stash instead of offloading it, predicts Bitwise CEO, Hunter Horsley.

"Once Bitcoin breaks through, say $130-150k, no one's gonna sell their Bitcoin," Horsley asserted. "And from there on, when people need liquidity, they're gonna borrow from an ever-growing pool of lenders."

Notably, JPMorgan Chase has already started using crypto ETFs as collateral, aligning with Horsley's thesis. If this trend catches on, Bitcoin might surge even higher, according to Horsley.

"This will further fuel the price. There's just not going to be enough Bitcoin."

Bitcoin's Short-Term Dynamics

Despite the recent price action, Bitcoin has been retesting the $110k mark earlier this week and is currently trading around $109.5k. However, Glassnode reports that selling pressure from long-term holders (LTH) spiked to $930 million per day, though it remains modest compared to previous local peaks.

In its weekly report, the on-chain analytics company noted, "This figure rivals the $840M/day seen during the $73K ATH, yet remains well below the $1.64B/day peak seen during the initial breakout above $100k."

Given the moderate selling pressure from LTH, Glassnode suggests that the current prices may be far from triggering a widespread distribution.

Key resistance and support levels to watch out for, according to Glassnode, are $115.4k and $97.6k, based on the short-term holder (STH) cost basis model. A dip below the STH realized price of $97.6k could potentially trigger a panic sell-off by this cohort, potentially disrupting the current bullish momentum.

Double-Top Worry?

Meanwhile, renowned analyst Peter Brandt suggested that the current price action resembles a double-top pattern from 2021 that culminated in a 75% plunge, hinting at a potential drop from $109k to $27k. However, historically, bear markets have seen Bitcoin plunge around the 200-weekly moving average, currently at $48k.

Key Insights:

  1. Institutions are progressively adopting Bitcoin, making it more attractive as collateral, possibly causing increased market stability and liquidity.
  2. Regulatory frameworks are evolving, with Spot Bitcoin ETFs gaining approval in major markets, providing a regulated pathway for investment.
  3. DeFi and traditional financial institutions' interest in crypto could spawn new financial instruments using Bitcoin as collateral, such as lending and borrowing platforms.
  4. Bitcoin's increasing adoption could further integrate it into traditional financial systems, expanding its market penetration.
  5. Institutions will require sophisticated risk management strategies to cope with the risks and challenges introduced by using Bitcoin as collateral.
  • The Bitwise CEO, Hunter Horsley, predicts that large-time investors could borrow against their crypto stash instead of selling Bitcoin, which might lead to a surge in its price.
  • JPMorgan Chase has already started using crypto ETFs as collateral, indicating a growing trend that aligns with Horsley's thesis, suggesting that Bitcoin might surge even higher.
  • Glassnode suggests that the current prices may be far from triggering a widespread distribution due to the moderate selling pressure from long-term holders, potentially indicating continued bullish momentum for Bitcoin.

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