Bitcoin’s massive sell-off could abate as large players opt to borrow against the asset.
Peter Brandt warned that BTC’s double top pattern could trigger a 75% dump to $27K.
The ongoing profit-taking above $100K may reduce as Bitcoin [BTC] climbs higher. According to Bitwise CEO Hunter Horsley, holders will borrow against their BTC stash instead of selling when it surges above $150K.
“I think once Bitcoin breaks through, eg, $130-150k, no one is going to sell their Bitcoin. And from there on, when people need liquidity, they are going to borrow from an ever-growing set of lenders.”
In fact, one of the largest wirehouses, JPMorgan Chase, has begun using crypto ETFs as collateral, further cementing Horsley’s claim.
If the trend picks up, BTC could blast even higher, added Horsley.
“All of which will further propel price. There’s simply not going to be enough Bitcoin.”
Bitcoin — What’s next in the short term
That said, Bitcoin reversed recent losses and briefly retested $110K earlier in the week. At press time, the asset exchanged hands at $109.5K.
But Glassnode stated that selling pressure from long-term holders (LTH) spiked to $930 million per day, but was relatively modest compared to past local peaks.
In its weekly report, the on-chain analytics firm highlighted,
“This figure rivals the $840M/day realized during the $73K ATH, yet remains well below the $1.64B/day peak seen during the initial breakout above $100K.”
Source: Glassnode
Given these modest offloading from LTH, Glassnode stated that current price levels may be far from triggering a ‘broader-scale distribution.’
On key prices to track, Glassnode marked out $115.4K and $97.6K as near-term resistance and support levels, based on the short-term holder (STH) cost basis model.
“The $97.6k STH cost basis continues to serve as a pivotal support level necessary for maintaining local bullish momentum. On the upside, the $115.4k zone emerges as the first significant resistance should the market enter price discovery.”
Source: Glassnode
For perspective, the STH realized price of $97.6K meant that most recent buyers acquired BTC around this level.
As such, a price dip below it could trigger a panic sell-off by this cohort. Such a scenario could dent the current bullish set-up.
That said, Peter Brandt made a contrarian projection, suggesting that current price action mirrored a 2021 double top pattern that led to a 75% drop. In such a hypothetical scenario, BTC would dip from $109K to $27K.
Source: Peter Brandt/X
But such massive dump may be far-fetched, given that past bear markets BTC plunge eased around the 200-weekly moving average (currently at $48K).
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