In a research note titled “Bitcoin’s Road to $100K – Tear Down This Wall,” Alex Thorn, Head of Firmwide Research at Galaxy Digital, provides an analysis of Bitcoin’s recent performance and the factors influencing its trajectory toward the $100,000 milestone.
Bitcoin has not traded below $90,000 for the past week, fueling anticipation that it will soon surpass the $100,000 mark. The BTC price has risen by as much as 50% since November 4, the day before the US election. After reaching new all-time highs of $99,860 on Friday, November 24, BTCUSD retraced by as much as 8% to $91,420.
“In earlier Bitcoin times, this drawdown wouldn’t have raised eyebrows, as sharp corrections were extremely common,” Thorn noted. “These days, however, all eyes are on Bitcoin, including many that have not been in the trenches of Bitcoin volatility for years.”
Thorn emphasized that corrections are a healthy part of market cycles. He remarked that “bull markets climb a ‘wall of worry.’” The period between March 14, 2024, when BTCUSD reached $73,835, and November 6, 2024, saw Bitcoin in a downward range for 237 days. This formed “one of the biggest and longest-to-resolve bull flags” Thorn had ever seen.
Historical data shows that Bitcoin’s bear markets have been severe, with previous cycles in 2012, 2015-2016, and 2019 seeing BTC trade more than 80% below its prior all-time highs. The March 2020 and late 2022/early 2023 periods saw Bitcoin drop to 75% of its previous highs. However, the recent 8% dip over the last week is relatively minor compared to the volatility observed during the 237-day downward channel between March and November 2024.
Who Is Selling Bitcoin Now?
Analyzing on-chain data, Thorn explored the current selling pressure and supply distribution. The supply held by long-term holders (LTH)—those who have not moved their coins for 155 days or more—has been declining as BTCUSD has risen post-election. This decline is more pronounced than during the profit-taking that capped the run to all-time highs in March. However, Coin Days Destroyed (CDD), a metric indicating the movement of older coins, is not spiking significantly. This suggests that very old coins are not moving on-chain in substantial volumes seen during previous market tops.
“If ‘long-term holder’ supply is declining but very old coins aren’t moving, who is moving and selling coins?” Thorn questioned. He explained that the sell pressure appears to be coming primarily from recent LTH supply—those who acquired Bitcoin during the 237 days of market consolidation between March and November 2024. The UTXO Realized Price Distribution (URPD) metric shows significant ownership of coins last moved between $52,000 and $72,000, indicating that these holders are taking profits as Bitcoin approaches $100,000.
In the options market, open interest for new options on spot-based Bitcoin ETFs totals more than $4.1 billion in notional value, with the majority ($3.1 billion) on call buying. Most call exposure is at strikes of $93,000 or higher, which Thorn interprets as a bullish signal. “Market participants are bullish and positioning for further upside,” he stated. Crypto-native dealers are net short gamma at $93,000, meaning they need to hedge by buying as prices rise and selling as prices decline, potentially amplifying market volatility until BTCUSD reaches $106,000.
Regarding leverage in the system, Thorn observed that while leverage exists, it appears mostly healthy rather than excessive. Perpetual swap funding rates are not near the elevated levels seen in March 2024 or during previous market peaks. The three-month annualized basis is increasing following the post-election price movement but remains well below levels associated with market tops. Open interest is at all-time highs, but a significant portion is attributed to the Chicago Mercantile Exchange (CME), likely related to ETF owners engaging in basis trades or hedging by ETF authorized participants.
Thorn expressed confidence that the Bitcoin bull market has “legs,” citing a combination of increasing institutional, corporate, and potentially nation-state adoption, as well as favorable regulatory and policy developments. He highlighted several factors that could propel Bitcoin higher in the near and medium term.
Catalysts That Will Bitcoin Propel Above $100,000
First, the easing of regulatory headwinds, including potential changes to the SEC’s Staff Accounting Bulletin 121 (SAB 121), could pave the way for major custody banks to enter the crypto space. “Given we are very likely to see a material shift in the OCC’s posture to banks interacting directly with cryptos, these big banks will eventually have their opportunity to get more involved,” Thorn predicted.
Second, a relaxation of the SEC’s application of the Howey Test to digital assets, or the expansion of “crypto asset securities” tradable within broker-dealers, could allow more entrants into the exchange space, including traditional financial institutions. This could also lead to the approval of more spot-based crypto ETFs in the United States.
Further institutionalization of the Bitcoin and crypto market could increase financing options, enhance liquidity, and make spot crypto more accessible through existing institutional trading platforms. This would raise the maturity level of the institutional crypto market and potentially revolutionize aspects of finance by merging traditional finance and decentralized finance. “Depending on regulatory posture and any legislation that is enacted, the merger of TradFi and DeFi may finally be upon us,” Thorn suggested.
On the political front, Thorn highlighted the pro-Bitcoin stance of the incoming US administration. Scott Bessent, a known advocate for Bitcoin and crypto, has been chosen as the 79th Treasury Secretary. Vice President-elect J.D. Vance owns Bitcoin, as do Elon Musk and Vivek Ramaswamy, who will lead the new Department of Government Efficiency. Commerce Secretary nominee Howard Lutnick owns significant amounts of Bitcoin, and his company, Cantor Fitzgerald, is deeply involved in BTC and stablecoin markets.
Fox Business reported that the Trump transition team is planning for the Commodity Futures Trading Commission (CFTC) to take the leading role in digital assets regulation, rather than the Securities and Exchange Commission (SEC). This move is seen by industry observers as favorable. “This marks the latest in a swath of pro-Bitcoin cabinet officials,” Thorn observed.
Thorn mentioned the intensifying discussion around a potential US Bitcoin strategic reserve, suggesting that other nations might seek to front-run the United States with more permissive policies on digital assets or by establishing their own reserves. Morocco, for example, has begun preparing new legislation to legalize crypto after banning it in 2017.
Upcoming events such as Bitcoin MENA in Abu Dhabi on December 9 and 10 could feature significant adoption announcements. The introduction of spot ETF options could contribute to increased liquidity and potentially reduced volatility, making it easier for large institutions to enter the asset class and possibly spurring interest among US retail investors, who represent 44% of retail equity options.
In conclusion, Thorn believes that the setup for BTC price over the next 12 to 24 months is unique and bullish. “All this to say that the setup for Bitcoin over the next 12 to 24 months appears unique and bullish,” he asserted. “We believe Bitcoin may find a strong base of support and could make another attempt to surpass the $100k level (the sell wall!) in the near term.”
At press time, BTC traded at $94,947.
Featured image created with DALL.E, chart from TradingView.com
