Bitcoin’s ($BTC) price has been on a rollercoaster ride recently, hitting a record high of $99,600 last week before falling below $92,000.
The cryptocurrency had surged 40% in three weeks following Donald Trump’s election win, but its recent drop has left investors wondering what comes next.
Long-term holders are selling
Market data from Glassnode shows that long-term Bitcoin holders (LTHs) are selling more than ever before, with 366,000 $BTC being sold monthly. This is the highest level of selling pressure since April 2024.
Most of these sales are coming from investors who bought Bitcoin six to 12 months ago, now selling 25,600 $BTC daily.
These holders bought their coins when prices were much lower than today’s $92,637, making it a perfect time for them to cash out and secure profits.
As Bitcoin approached $100,000, many investors chose to sell before the price could potentially fall.
Analyst Rekt Capital has warned that Bitcoin might drop another 25% in the next two to four weeks, possibly reaching $70,500.
While this could be a short-term dip, many experts still see a strong future for Bitcoin.
Experts explain the correction
The recent price drop isn’t surprising to many in the cryptocurrency space.
The founder of 10x Research, Markus Thielen, sees this as a “healthy consolidation phase”. He explained that Bitcoin was technically overbought, and the correction helps stabilise the market.
Broader factors, such as potential changes in US Federal Reserve policies, might also affect Bitcoin and other high-risk investments.
The head of finance at BTC Markets, Charlie Sherry, noted that these kinds of pullbacks are normal. He called the current decline “a final flush” that clears out market excesses before
Bitcoin can rise to six figures. Sherry noted that corrections help reduce leverage in the market and prepare for future growth.
Popular trader Bluntz also shared his optimism with his 298,000 followers on X, saying, “I think up from here, and it ain’t going as low as people think”.
Similarly, the co-founder of ZX Squared Capital, CK Zheng, said the $100,000 mark is a psychological barrier.
Zheng sees the current price dip as a great opportunity for new investors and predicts that Bitcoin will break $100,000 within months, especially with the Trump administration’s pro-crypto policies.
Institutional buying and market data
Bitcoin’s correction became more pronounced after MicroStrategy, a major corporate investor, announced it had purchased 55,500 $BTC for $5.4 billion at an average price of $98,000.
Usually, large purchases like this reduce Bitcoin’s circulating supply and support its price. However, Bitcoin dropped 4% following the announcement.
Analysts suggested that short-term holders (STHs) selling off their coins contributed to this decline. These holders often react to sudden price movements, adding pressure to the market.
Rising fear-of-missing-out (FOMO) among investors has also added to the volatility. On-chain metrics such as MVRV (Market Value to Realised Value), NUPL (Net Unrealised Profit/Loss), and Puell Multiple indicate that Bitcoin is still in a bull market.
CryptoQuant analysts believe that corrections are a normal part of the market cycle and help ensure long-term sustainability.
However, Trader Skew highlighted the importance of Bitcoin holding above the $92,000 mark. He said this level is critical for the market, warning that if it’s lost, the market could see more selling.
Exchange-traded funds (ETFs) have been a stabilising factor, as they absorbed much of the selling pressure from long-term holders. Analyst Kyle du Plessis noted that US spot ETFs absorbed 90% of the 128,000 $BTC sold by long-term holders in November, showing strong institutional demand.
Despite the current challenges, many believe Bitcoin is still on track for further growth. The CEO of Crypto.com, Kris Marszalek, suggested the market might need more deleveraging before Bitcoin can sustainably break $100,000.
