Scaling the Sell Wall to $100k Bitcoin

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Cliff-Notes:

• Bitcoin's correction from its near-$100k high reflects typical price discovery dynamics, as long-term holders take profits and psychological resistance levels dominate short-term trading behavior.
• Spot bitcoin ETFs and corporations have purchased over 281,000 BTC during recent weeks, but long-term holder distribution of 407,021 BTC over that same period suggests this correction may extend further before resuming an upward trajectory.
• While bitcoin remains sensitive to the contracting global M2 money supply, sustained net inflows from ETFs and corporations could allow BTC to buck the downtrend and prevent a 25% correction if it continues following the path set forth by global M2 over the last several weeks.

Bitcoin made a valiant effort at the $100k mark, rising as high as $99,728 before plunging into a correction of 8.7% at the time of writing, to ~$91,000.

This month has thus far been one of bitcoin's best in history. Up 31% since the start of the month, this November ranks as bitcoin's 18th best-performing month on a % returns basis over the last decade of 120 months. had it closed the month at its aforementioned all-time high and not entered into this correction, it would have been a 42.15% monthly gain, making it the 9th best month of the last decade:

This correction is typical of bitcoin, particularly during early bull runs. During price discovery phases, bitcoin breaks out above previous all-time highs and rises without any technical sell level, as the price has never been in these zones before. As such, rather than looking back at history for an indication of where selling can occur, we have to look at psychological levels—in this case, the $100,000 mark.

These price discovery periods include several corrections, ranging from 10% to 55% during the 2021 price discovery period as seen below when bitcoin ascended to the $60,000 range twice. These corrections are driven by profit-taking from long-term holders, and panic selling from short-term holders—eventually, these transient periods of selling are exhausted and bitcoin resumes its ascent higher.

This is a bull market, and the path of least resistance is much higher, but there are always bumps along the way. In this case, we are in a correction that has seen bitcoin fall 8.7% at the time of writing, but it could extend well beyond that given historical norms:

$100,000 per bitcoin is perhaps the most significant milestone for bitcoin of all time—crossing $100k cements bitcoin's position as a globally recognized asset, a milestone that has been discussed at length for its 15+ years of existence and the 14 years that it has had a market price. Headlines about $100,000 bitcoin will abound, fueling even broader interest among cohorts who weren't invested, but now likely have access thanks to the spot bitcoin ETFs available in their 401k, pension funds and endowments that now see the runaway freight train of BTC and decide to allocate, and nation-states who eye the world's leader likely establishing a Strategic Bitcoin Reserve and are looking to get out ahead of them. The most substantial aspect of $100,000 bitcoin is that it is an inflection away from a speculative retail asset in the mind of the market, and toward a bonafide base layer global reserve asset—one that is on track to usurp gold and demonetize a substantial portion of the global fixed income market thanks to superior real returns and zero counterparty risk.

$100,000 isn't the destination, but a mile market on the way to $1,000,000 per bitcoin—as such, you should think of bitcoin not in terms of where it is in absolute terms relative to its history, but where it is going. Don't fall victim to unit bias once the $100k mark is crested—instead, work to understand that at that price level, 10 units of 1 bitcoin can be acquired for one cent. Given that bitcoin has 100 million satoshis per coin, bitcoin is still very, very cheap.

So, how do we climb the sell wall to reach $100,000 bitcoin?

We answer that question by looking at who is selling, how much they are selling, and who is on the other side.

Selling is largely coming from long-term holders (LTH) taking profits as bitcoin's price approaches $100k. Long-term holders are defined as addresses that have held bitcoin for 155 days or more.

Technical Breakdown:
Long-term holders are determined based on the entity's average purchasing date—they transition from short-term holders (entities who have held for less than 155 days) on a gradient of 10 days.

Long-term holders have sold a net 407,021 BTC over the last 7 weeks since October 8th. LTHs always sell into price strength during bull markets. Take a look at the same 2021 price discovery phase—LTHs sold 976,058 BTC in total from the leadup to breaking the prior all-time high and in the weeks after until BTC reached $35,600, which is when LTH selling decelerated and they eventually became net accumulators again at $60,000.

Long-term holders became net sellers well before bitcoin reached its prior ATH, and reached their highest selling magnitude when bitcoin's price had only reached only 53% of its bull market peak. Distribution of coins from LTHs to STHs is standard of all BTC bull markets, and this time is no different. They take profit as the price goes up, and eventually become net accumulators once more. This makes LTH distribution definitively not a top signal, merely an indicator that the bull market is well underway and profit-taking from people who've been here for a while has begun. Long-term holders are the major sell-side cohort:

Over this same period, ETFs purchased 146,900 BTC and corporations with a public bitcoin acquisition strategy purchased 134,901.11 BTC—MicroStrategy acquired 134,480 BTC, Semler Scientific acquired 297 BTC, and Metaplanet acquired 124.11 BTC. This equates to an approximate total buy-side between the spot BTC ETFs and corporations of 281,801.11 BTC over the same period that long-term holders observable on-chain sold 407,021 BTC.

To get more granular—last Friday, the spot bitcoin ETFs purchased ~5,400 BTC on behalf of their clients, while long-term holders sold a total of 5,503 BTC. Bitcoin purchases from spot ETFs were enough to absorb LTH selling pressure all the way up to its ATH, but now LTH selling is outpacing ETF net inflows.

The great wall of $100k will be breached soon enough. First, long-term holders need to finish their profit-taking, after which their net selling will decelerate, total net buying from retail, ETFs, and corporations will overtake the pace of selling, and we will ascend through all of the limit orders set at and around $100,000.

Since September 2023, bitcoin has closely tracked global M2 with a ~70-day lag, reflecting its sensitivity to global liquidity dynamics. Over the past two months, global M2 has declined from $108.3 trillion to $104.7 trillion, driven by a combination of factors. A strengthening U.S. dollar has devalued foreign currency-denominated M2 when converted into dollars, contributing to the decline. Additionally, economic slowdowns in various regions have further dampened lending and deposit creation. Bitcoin mirrored the expansion in global M2 with high sensitivity, tracking the rise from $100 trillion to $108.3 trillion. If it continues to follow the current contraction in M2, a 20-25% correction could materialize, potentially pulling bitcoin down to roughly $73,000—not a price prediction, but a stark reminder of bitcoin's tether to the global money supply:

Bitcoin could buck the trend of contracting M2, which it has done several times before. Namely from 2022-2023 due to the FTX collapse and interest in the space evaporating as a result. It could resist this two-month bout of M2 deflation thanks to structural ETF inflows and corporate buying pressure, but only time will tell:

Either way, a correction at this point seems about right. As mentioned before, these rapid run-ups in bitcoin's price always have pitstops along the way, and we're currently in a correction that may range anywhere from 10% to 25% in size if we end up following the path of global M2 to a tee.

During price corrections, it’s vital to understand the asset you hold, the macro environment it exists in, and the forces driving it higher long-term. If you truly understand bitcoin, you don’t panic sell. If you panic sell, it’s a clear sign you haven’t done the work.

Take it easy,

Joe Consorti

Theya is the simplest way to take full control of your bitcoin. With our flexible multi-sig vaults, you decide how to secure your keys.

Whether you prefer keeping all keys offline, shared custody with trusted contacts, or robust mobile vaults across multiple devices, it's always Your Keys, Your Bitcoin.

Get started with Theya on the App Store or via our Web App.