What’s holding Bitcoin back from breaking the $100,000 milestone?

A CNBC report states, bitcoin, the world’s largest cryptocurrency, has struggled to breach the $100,000 mark, even after a robust rally that pushed its value to an all-time high of $99,000 last week.

The rally, sparked by Donald Trump’s re-election as US president on November 5, saw Bitcoin surge over 40%.

Source: CoinGecko

Profit-taking among long-term holders and market uncertainties have paused the momentum.

As of early Monday, Bitcoin was trading at $98,243.25, showing only marginal gains, according to CoinGecko data.

Analysts remain divided on whether this is a short-term correction or a signal of deeper market consolidation.

Profit-taking by long-term holders caps Bitcoin's rise

One of the key factors keeping Bitcoin below the six-figure mark is profit-taking by long-term investors.

According to Andre Dragosch, head of research at Bitwise, substantial distributions of Bitcoin from long-term holders have contributed to the recent price resistance.

Dragosch notes that while sentiment remains high, the market appears overstretched, leading to a temporary pause in the rally.

This pullback, however, is viewed by some as a "bull market correction" rather than a reversal of the broader upward trend.

The supply constraints caused by the recent Bitcoin halving, which reduced miners’ rewards by 50%, are expected to support prices well into 2025.

Leveraged positions heighten volatility in crypto markets

High levels of leverage within the crypto ecosystem have amplified volatility, making the market more prone to corrections.

Galaxy Digital CEO Mark Novogratz highlighted this issue, describing the crypto market as “levered to the gills.”

Such leverage can lead to sharper price swings, especially during periods of heightened trading activity.

Adding to the volatility, an unknown seller reportedly liquidated between $14 billion and $15 billion worth of Bitcoin in the past week, creating downward pressure on prices.

Despite these challenges, Novogratz maintains that Bitcoin reaching $100,000 is "inevitable," though short-term corrections are expected as part of the journey.

Can Bitcoin overcome the $100,000 barrier?

Reaching $100,000 would be a significant psychological milestone for Bitcoin, but it remains elusive.

David Morrison, senior market analyst at Trade Nation, suggests that the level may be more of a "high hurdle" than a simple resistance point.

He warns that if the price fades from current levels, it could deter some investors from pushing the market higher.

Despite these concerns, Morrison acknowledges the possibility of a renewed surge in momentum, which could push Bitcoin above the $100,000 threshold.

However, such a move would require significant market energy and broader investor participation.

Trump’s pro-crypto stance boosts sentiment

Donald Trump’s pro-crypto policies have been a major factor in Bitcoin’s recent rally.

His pledges to turn the US into a global crypto hub, establish a national crypto stockpile, and replace Securities and Exchange Commission Chair Gary Gensler have bolstered market optimism.

Analysts caution that implementing these policies will take time and face legislative hurdles.

Deutsche Bank strategist Marion Laboure highlights that while Trump’s support is positive for sentiment, major regulatory reforms will require Congressional approval, making them long-term objectives rather than immediate catalysts for market growth.

Supply dynamics and regulation could shape Bitcoin's future

The recent halving event has tightened Bitcoin’s supply, a dynamic that typically supports higher prices.

Regulatory developments remain a wildcard.

While Trump’s administration is expected to take a more crypto-friendly approach, the exact impact of potential legislation remains uncertain.

Analysts believe that regulation, if balanced, could provide a net positive for the industry by increasing institutional adoption and reducing market manipulation.

However, over-regulation or delays in implementing supportive policies could dampen Bitcoin’s growth prospects.