TLDR
Bitcoin hedge fund CEO Charles Edwards predicts price could double after breaking $100,000
Largest-ever sell wall exists at $100,000 level, clearing it could trigger rapid price appreciation
Q4 and Q1 historically deliver majority of returns in Bitcoin’s 4-year cycle
ETFs are steadily absorbing Bitcoin supply from the market
Base case prediction is $140,000, with optimistic scenario of $200,000 if major adoption occurs
Charles Edwards, founder of crypto hedge fund Capriole Investments, has outlined his case for Bitcoin’s price doubling after breaking through the $100,000 level. In a recent appearance on The Milk Road Show, Edwards detailed the technical and fundamental factors supporting this prediction.
The cryptocurrency currently faces its largest-ever sell wall at the $100,000 mark, according to order book data. Edwards explains that once this resistance level clears, the market could experience rapid price appreciation due to limited available supply.
Drawing parallels with the traditional gold market, Edwards points to gold’s recent 33% increase over 16 weeks, representing a $3.8 trillion move in market value. He notes that Bitcoin would only need a $2 trillion increase to move from $100,000 to $200,000, making such a move feasible given Bitcoin’s 24/7 trading nature and global accessibility.
The current market cycle shows particular promise due to seasonal strength typically observed in the fourth and first quarters. Historical data indicates that 90% to 95% of cycle returns occur within a 12 to 18-month period following each halving event.
Will this be the last 4-year cycle?
We sat down with @caprioleio on the Milk Road Show and discussed:
– The last cycle that matters– The $100k mark– Global Bitcoin adoption trends of governments
Tune in⤵️https://t.co/FLRQQI37Zv pic.twitter.com/MWXcYpRNup
— Milk Road (@MilkRoadDaily) December 3, 2024
ETF demand has emerged as a key factor in the current market dynamic. Edwards notes that these investment vehicles have been “ferociously” absorbing Bitcoin from the available supply, creating sustained buying pressure in the market.
Investors should prepare for continued volatility despite the bullish outlook. Edwards emphasizes that 20% to 30% corrections remain normal during bull markets, potentially testing support levels around $80,000 if leverage and funding rates increase without breaking through the current sell wall.
The traditional four-year Bitcoin cycle, driven by halving events, may be evolving as the asset matures. Edwards suggests that future market cycles could see less dramatic drawdowns, possibly limited to 60% rather than the 80% drops seen in previous cycles.
Several potential catalysts could accelerate Bitcoin’s price movement. Edwards discusses the possibility of a U.S. government Strategic Bitcoin Reserve, estimating a 30% probability of implementation in 2025. Corporate adoption represents another growth driver, with Microsoft’s upcoming vote on Bitcoin holdings cited as a notable example.
Base case projections put Bitcoin’s price at $140,000 during this cycle, assuming current market conditions persist. A more optimistic scenario could see prices reach $200,000 if major adoption catalysts materialize.
The relationship between Bitcoin’s market size and potential price movements remains a key consideration. Edwards notes that Bitcoin’s smaller market capitalization compared to traditional assets allows for more dramatic price swings when supply constraints meet increased demand.
Institutional investment continues to grow through various channels. The success of spot ETFs has created new avenues for traditional investors to gain Bitcoin exposure, contributing to steady demand growth.
Market maturity shows signs of increasing as Bitcoin integrates more deeply with traditional financial systems. This evolution could lead to more stable growth patterns and reduced volatility in future cycles.
The psychological impact of breaking $100,000 could trigger new market dynamics. Edwards suggests that many potential investors struggle to comprehend Bitcoin at such price levels, but breaking this barrier could catalyze new investment flows.
The current market structure shows similarities to previous bull cycles while displaying unique characteristics. Edwards points to the combination of institutional adoption, ETF flows, and technical factors as creating distinctive conditions for price appreciation.
Bitcoin traded at $94,814 at the time of reporting, approaching the discussed $100,000 resistance level.
