Bitcoin about to put in a double top?
Since its all-time high of $111k, Bitcoin has corrected about 6% to $105k. After hovering at this level for several days, some investors are now concerned we could be seeing the formation of another double top, similar to 2021. Frankly, I expected Bitcoin to push higher after breaking its all-time high in May. The reason it hasn’t is mainly because the demand side looks weak.
For one, ETF inflows have stalled, even turning negative by nearly $1 billion in late May and early June. Strategy also appears to be struggling to attract fresh capital, having purchased only 705 BTC on June 2.
On-chain dynamics show that coins held for 3 to 5 years — amounts comparable to local tops in March and November 2024 — are being sold into the market. The inability to absorb these coins at all-time-high prices suggests demand is fading.
From a sentiment perspective, last week’s Bitcoin conference felt like a potential top signal; watching the livestream gave me the impression that the enthusiasm from Bitcoin Treasury companies might be at a peak level.
The upcoming Circle IPO is another example: targeting a fully diluted valuation of up to $7.2 billion, the upcoming IPO is said to be oversuscribed by 25x. If this doesn’t give you late-cycle vibes, I don‘t know what will.
Finally, leverage remains elevated, as seen in futures volume, signaling that many investors are still positioned for immediate upside. Although this has eased somewhat since the all-time high, it’s still not non-negligible.
So, where do we stand? A week ago, I speculated that BTC would go to $120k fairly fast. I remain cautiously bullish in the short term, particularly as long as we hold above the short-term holder cost basis at $97k. Should we fall below that level, market psychology could take a real hit and things would have to be seriously assessed.
To stay above it, we’ll need to see fresh demand step in. If we dip lower in the coming days, I’d expect the first meaningful demand and support zone to appear around $99k.
Thoughts?
