Bitcoin's journey to new heights faces a significant hurdle, and it's all about supply and demand. The key question is: can Bitcoin break through the resistance at $98,400?
Glassnode, an on-chain analytics firm, has released a report highlighting Bitcoin's supply overhang beyond the $98,000 mark. This overhang could potentially limit Bitcoin's upward momentum, but here's where it gets controversial...
Bitcoin's recent rally encountered resistance near the Realized Price of short-term holders (STHs). This metric tracks the average cost basis of investors on the BTC network. Specifically, the STH Realized Price measures the average acquisition level of traders who bought Bitcoin within the last 155 days, currently sitting at $98,400.
The recent recovery run hit a snag at this level, possibly due to selling from recent buyers who were underwater and used the rally to exit near their break-even point. Glassnode explains that this rejection mirrors the market structure observed in Q1 2022, where repeated attempts to reclaim the cost basis of recent buyers led to prolonged consolidation.
To gain a more detailed perspective, we can examine the UTXO Realized Price Distribution (URPD) indicator. The Bitcoin URPD chart reveals that a notable portion of STH supply has a cost basis between the current level and $98,000. This supply represents tokens redistributed by top buyers to newer market participants during the price rally.
However, not all top buyers sold. The graph shows that long-term holder (LTH) supply is becoming a significant factor at levels around and above $100,000. Coins are considered LTHs once they mature past the 155-day age bracket. The buildup of LTH supply at these levels suggests that some bull market entrants are committed to holding.
Glassnode notes that this unresolved supply overhang continues to exert selling pressure, likely capping attempts above the $98,400 STH cost basis and the $100,000 level. A clean breakout would require a substantial and sustained increase in demand momentum.
As Bitcoin's price action unfolds, the question remains: will it overcome these supply clusters that are still underwater? The upcoming moves in the Bitcoin market will be crucial to watch, especially with major supply clusters yet to find their footing.
BTC Price Update: Bitcoin's value has been on a downward trajectory since its rejection from the STH Realized Price, now trading around $89,100.
