Will Bitcoin Struggle to Break $98,400? Here’s What Could Hold It Back
In recent bitcoin news, on-chain analytics signal potential resistance for Bitcoin as it approaches the $98,400 mark. This level represents the Realized Price of short-term holders (STHs), an on-chain metric that indicates the average cost basis for investors who have acquired Bitcoin within the last 155 days.
Understanding Realized Price and Its Implications
The Realized Price is crucial for analyzing market dynamics. It provides insight into where short-term traders might face break-even points, which can lead to sell-offs. Currently, Bitcoin’s recent rally encountered resistance near this Realized Price, suggesting selling pressure from traders looking to exit at their cost basis.
Short-Term Holders and Market Dynamics
The Short-Term Holder Realized Price, currently at $98,400, mirrors past market structures. A similar pattern was observed in early 2022, when Bitcoin struggled to surpass recent buyers’ cost basis, leading to prolonged consolidation. This scenario underscores the significance of this price level as a psychological barrier for traders.
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UTXO Realized Price Distribution: A Deeper Look
Another important metric, the UTXO Realized Price Distribution (URPD), shows that a significant portion of the STH supply has a cost basis between the current price and $98,000. This data highlights the redistribution of tokens during recent price rallies. Notably, not all top buyers have sold, as seen in the accumulation by long-term holders (LTHs) at and above $100,000.
Coins transition to the long-term holder category after maturing beyond 155 days. The increase in LTH supply at these levels indicates that some investors are willing to hold despite potential short-term profit opportunities.
The Supply Overhang and Its Impact
The persistent supply overhang remains a challenge, exerting sell pressure at key price levels. To overcome this barrier, Bitcoin requires a sustained increase in demand momentum. A clear breakout above $98,400 and the $100,000 mark will need significant buying interest to counteract this supply.
Current Bitcoin Price Movement
Currently, Bitcoin’s price is around $89,100, following a downward trend after its rejection from the STH Realized Price. The coming days will reveal whether Bitcoin can muster the necessary demand to break above the resistance levels, especially with major supply clusters still underwater.
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In conclusion, Bitcoin faces potential resistance as it nears the Realized Price of short-term holders. The path to breaking these levels lies in sustained demand, which is essential for overcoming the existing supply overhang. As the market evolves, investors will be watching closely to see if Bitcoin can defy these barriers and chart a new path forward.
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