TLDR
- Bitcoin’s market structure holds strong, but slipping below $100K could trigger anxiety.
- Growing institutional demand supports Bitcoin’s market, despite short-term volatility.
- Bitcoin’s market is no longer following its traditional four-year cycle, says Thorn.
- Institutional players are leading Bitcoin’s accumulation, reducing volatility.
Bitcoin’s bull market is still holding strong, but it may face challenges in the near future. According to Alex Thorn, head of research at Galaxy Digital, while the overall trend remains intact, a slip below the $100,000 mark could lead to heightened anxiety and disrupt the current market structure. Thorn believes that although recent price fluctuations haven’t been driven by Bitcoin’s fundamentals, the cryptocurrency is currently influenced more by macroeconomic factors.
Bitcoin’s Bull Market: Strong but Vulnerable
Thorn expressed confidence in the continued strength of Bitcoin’s bull market, noting that it is “structurally intact.” However, he highlighted that the market is at a critical juncture, where a sudden shift in sentiment could occur. If Bitcoin falls below the $100,000 threshold, it could spark considerable unease among investors. Thorn warned that such a decline could undermine the market’s current structure, leading to potential setbacks.
Despite the recent pullback, Thorn emphasized that it was not fundamentally related to Bitcoin itself. “Nothing about Bitcoin’s drop has been fundamental about Bitcoin,” he explained. Instead, the market is reacting more to broader macroeconomic trends. According to Thorn, Bitcoin is now behaving more like a macro asset, influenced by global economic conditions rather than traditional market dynamics tied to its individual performance.
Post-100K Era: Institutional Demand Plays a Key Role
Thorn also pointed out that Bitcoin’s market is entering a “post-100K era,” where it is no longer in the early stages of its growth. While this shift may mark a more mature phase of the market, Thorn believes it is supported by a growing institutional demand for Bitcoin. This growing institutional involvement provides a “passive bid” that continues to prop up the asset’s value.
The increasing institutional interest signals a change like Bitcoin’s accumulation process. Thorn explained that Bitcoin’s market is characterized by a slower pace of accumulation compared to past cycles. This shift is due in part to the greater involvement of institutional players who are more patient and less prone to quick price movements. As a result, the market is building a stronger foundation with less realized volatility, signaling that the asset’s long-term outlook remains positive despite short-term fluctuations.
The Shift Away from the Traditional Four-Year Cycle
In addition to the growing institutional demand, Thorn discussed the change in Bitcoin’s market cycles. He dismissed the idea that Bitcoin still follows its traditional four-year cycle, which has historically been tied to the Bitcoin halving events. Instead, he pointed out that the market is evolving and “looks different” now.
Thorn highlighted that this shift is a result of Bitcoin’s increasing institutional ownership, which is changing how the market behaves. The typical volatility and rapid price swings seen in previous cycles may be less pronounced moving forward. The current environment is one of slower accumulation, which is more characteristic of long-term investors than short-term speculators. As the market matures, Thorn believes that volatility will be lower, and Bitcoin’s value will be supported by these institutional players.
Potential Risks in the Current Market Structure
Despite the bullish outlook, Thorn remains cautious about the risks facing Bitcoin’s market in the near future. He reiterated that if Bitcoin falls below the $100,000 level, it could trigger a shift in sentiment that might pose a significant risk to the ongoing bull market. The key levels are crucial in determining whether the market will continue to grow or face a downturn.
Overall, while the long-term outlook for Bitcoin remains positive due to increasing institutional demand, the market is not immune to sudden shifts. The current phase represents a period of change where Bitcoin’s behavior is influenced more by macroeconomic factors and institutional involvement than by the cycles of previous years. As such, Bitcoin’s next steps will depend heavily on whether it can maintain its position above critical levels like $100,000.
