What does Bitcoin need to do to return to $120,000?

The UK's digital asset custodian, Copper, believes that the long decline of Bitcoin in recent months is nearing its final phase, with market dynamics now resembling a "behavior of the end of a bear trend," a phase that historically precedes major reversals.

A Copper, an institutional custodian of crypto based in London, founded by former UK Finance Minister Philip Hammond, stated in the Wednesday Opening Bell note that the mechanisms driving Bitcoin's decline have changed.

According to the company, the first part of the current downtrend was dominated by a high sensitivity to ETF flows, where redemptions pushed prices down. But this relationship has now unraveled.

ETF influence has decreased — a key sign of the end of the downtrend

Copper analysts say that the 30-day elasticity between ETF flows and returns has dropped to one of the lowest levels of the year, a clear sign that the market has already absorbed significant sales.

“This does not confirm a reversal,” wrote Copper, “but confirms that the direct and flow-driven part of the move has been left behind.”

Copper grouped Bitcoin ETF holdings into simple “ranges,” structural zones showing where Bitcoin's price tends to stabilize depending on the amount of BTC that ETFs are holding. They suggest that these ranges have been surprisingly consistent:

$40,000–$60,000: anchored by lower ETF ownership

$70,000–$90,000: accumulation at the mid-level

$100,000–$120,000: the upper structural level

These, according to Copper, are not random concentrations. They behave like price shelves in steps that Bitcoin climbs as demand for ETFs grows.

“As ETFs accumulated more Bitcoin, Bitcoin continued to shift to higher price zones, almost like climbing a ladder,” said analysts at Copper.

Copper's analysis shows that when ETFs push Bitcoin into a new ownership range, the next 10 days historically see gains of 10–13%. The market adjusts to the new level of institutional ownership during this period. However, once ETF inflows stabilize within this range, future returns tend to flatten, meaning prices stop rising sharply and the market enters a more sideways phase.

The market is absorbing ETF sales

Bitcoin is currently trading around $86,000, but Copper says that BTC ETF holdings are primarily concentrated at the top of its historical range, in the higher ownership range historically associated with the $100,000–$120,000 price zone.

According to Copper, it is not just the range itself that matters, but how Bitcoin behaves within it.

“Future behavior within these shelves is what matters for the outlook,” analysts said. “When ETFs first enter a new ownership range, the next ten days historically produce a strong follow-up to the upside, averaging between 10–13%. Once a range is fully occupied, future returns flatten to approximately 1–2%. And in the highest range, where we are now, the average ten-day return actually becomes slightly negative. This is the only range in the entire dataset with a negative future return profile.”

This, says Copper, explains why Bitcoin sometimes rose even on days of negative ETF flows; the gains are absorbed, but without sustained inflows, the market cannot build a new uptrend. According to analysts, the market is in the final phase of the downtrend. A return to the $100,000–$120,000 range depends on a significant shift in ETF flows, either retreating to a lower range for a short-term increase or advancing with strong accumulation to trigger a true breakout upward.

“Until ETFs retreat to a lower range or advance to a higher range with sustained flows, the market will likely move primarily sideways with a slight downward trend. We are in the final phase of the downtrend, but not yet in the early phase of a new uptrend,” analysts added.

Coinbase signals positive developments in Europe

While short-term signals remain mixed, the broader institutional landscape in Europe is showing a different story.

Keith Grose, the new CEO of Coinbase UK, says that the region is undergoing a structural change in how regulated institutions interact with digital assets. One example: the recent decision by the Czech National Bank to test a small portfolio of digital assets, one of the first pilots controlled by a central bank in the EU.

Grose states that movements like this are early but significant.

“Market conditions are changing as institutions across Europe adopt a more structured and regulated approach to digital assets,” he said. “We are seeing clearer structures, more robust infrastructure, and early examples of central banks conducting controlled pilots... including the recent test by the Czech National Bank.”

He adds that, although the public does not yet feel the shift — “You are still not paying for purchases with Bitcoin in the UK” — Europe is quietly building the foundation for digital assets to become a significant part of future financial and payment infrastructure.

“This makes the need for secure, compliant, and transparent infrastructure more important than ever,” Grose stated.

The article What Does Bitcoin Need to Do to Return to $120,000? was first seen on BeInCrypto Brazil.