Bitcoin's Path Back to the $100K–$120K Range: Insights from Copper

According to Copper, a UK-based digital asset custodian, the prolonged downturn in Bitcoin's price may be nearing its end. Market dynamics now appear to align with typical behaviors seen before significant recoveries.

Key Takeaways:

Copper indicates that Bitcoin's extended price drop might be nearing its conclusion, with market dynamics showing signs of potential recovery.
The influence of ETFs on Bitcoin prices has diminished, indicating the market has absorbed substantial sales.
Specific ETF price bands indicate Bitcoin's behavior and potential for recovery, with current holdings concentrated in higher price brackets.
The overall market is in a sideways, downward trend, requiring significant ETF flow changes for a return to the $100K–$120K range.
Coinbase’s CEO highlights positive developments in Europe's approach to digital assets, marking a shift towards more regulated and structured engagement with cryptocurrencies.

Copper, founded by former UK Chancellor Philip Hammond, shared insights in its Opening Bell report that the factors influencing Bitcoin's price decline have changed.

Initially, the downturn was heavily influenced by ETF flows, which consistently drove prices down. However, this relationship appears to have weakened.

The Decline of ETF Influence: An Important Indicator in Late Downtrends

Copper's analysts note that the 30-day responsiveness between ETF flows and Bitcoin returns has reached one of the year's lowest points. This is a clear indication that the market has absorbed substantial selling pressure.

While Copper stated that this doesn’t confirm a market reversal, it does suggest that the simpler, flow-driven factors of the decline are no longer at play.

They have categorized Bitcoin ETF holdings into distinct "bands," indicating structural price levels dependent on the amount of Bitcoin held by ETFs. Copper has found these bands to be remarkably consistent, functioning like price steps that Bitcoin rises through as demand for ETFs increases.

“As ETFs accumulated more Bitcoin, Bitcoin kept relocating into higher price zones, almost like stepping up a staircase,” remarked Copper’s analysts.

Their analysis indicates that when ETFs initially drive Bitcoin into a new ownership band, the following ten days usually witness gains between 10% to 13%. The market tends to adjust to this new level of institutional ownership during this period. However, once ETF inflows settle within that band, returns tend to stabilize, leading to less dramatic price movements.

Bitcoin’s Current Market Position and ETF Selling

Currently, Bitcoin is trading at around $86,000, with ETF holdings primarily situated at the upper end of their historical range. This corresponds to the price zone between $100,000 and $120,000.

Copper emphasizes that it’s not just the band itself that matters, but Bitcoin's behavior within it.

“The forward behavior inside these shelves is crucial for future outlook,” the analysts noted. “When ETFs first transition to a new ownership band, the next ten days traditionally yield strong upward momentum of 10–13%. However, once a band is fully occupied, forward returns tend to level off to about 1–2%. In the highest band we are currently in, the average ten-day return can even dip slightly negative. This is the only segment within the dataset showcasing a negative forward return profile.”

This observation explains why Bitcoin has occasionally increased even on days with negative ETF flows; the gains are absorbed. However, without consistent inflows, the market struggles to establish a new upward trend. According to the analysts, the market is approaching the final phase of the downtrend. A return to the $100K–$120K range hinges on significant shifts in ETF flows, either returning to a lower band for temporary gains or significantly accumulating to initiate a true breakout.

“Unless ETFs move back into a lower band or break into a higher one with steady inflows, the market will likely experience minimal movement, leaning slightly downward. We are in the late phase of the downtrend but have not yet transitioned to the early stage of a new uptrend,” the analysts concluded.

Coinbase Points to Growing Positivity in Europe

Despite mixed short-term signals, the wider landscape for institutional investors in Europe suggests a more optimistic trend.

Keith Grose, the new CEO of Coinbase UK, highlights a structural change in how regulated institutions are interacting with digital assets within the region. Notably, the Czech National Bank's recent initiative to trial a small, controlled digital asset portfolio marks one of the first pilot programs by a central bank in the EU.

Grose notes that these movements, while still in the early stages, are significant.

“Market conditions are transforming as institutions across Europe adopt a more structured and regulated approach to digital assets,” he stated. “We are witnessing clearer regulations, stronger infrastructures, and initial examples of central banks conducting controlled pilots, including the Czech National Bank's recent test.”

He adds that while the public may not yet feel these changes—“You’re not yet paying for groceries with Bitcoin in the UK”—Europe is gradually laying the groundwork for digital assets to become a crucial aspect of future financial systems and payment infrastructures.

“This emphasizes the growing need for safe, compliant, and transparent infrastructure,” Grose concluded.