Over the past week, the price of Bitcoin has gradually climbed back to the $108,000 level, supported by a mild rebound across the broader cryptocurrency market.
However, on-chain data suggests this recovery might soon face significant headwinds. Increasing selling pressure from two key groups—miners and long-term holders (LTHs)—threatens to erase these recent gains for the world's premier crypto asset.
Mounting Bitcoin Selling Pressure Is a Key Concern
Data from CryptoQuant shows that BTC's "Visible Supply" metric has once again turned negative. This indicates that buying power is struggling to absorb the consistently increasing amount of coins entering the market.
As of this writing, the 30-day Simple Moving Average (SMA) for this metric sits at -36.98. The Visible Supply indicator measures the balance between new market demand and the supply coming from two primary sources: newly minted coins from mining and coins moved from the wallets of long-dormant LTHs.
A negative value signals that the number of BTC flooding into the market is exceeding the capacity of new buyers to soak it up. While recent geopolitical tensions involving Israel, Iran, and the U.S. have shown signs of easing, the market weakness they triggered appears to be lingering.
This bearish expectation is further supported by the BTC Long/Short Ratio. This ratio currently reads 0.96, indicating that traders holding short positions are in the majority.
The Long/Short Ratio reflects the number of long (buy) contracts versus short (sell) contracts in the market. A value greater than 1 shows that most traders are betting on a price increase. A value below 1, like BTC's current reading, forecasts a widespread market expectation that the price will continue to move downward.
The dominance of short positions in the derivatives market aligns with the shrinking demand visible on-chain, together strengthening the case for an impending price correction.
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A Supply Surge Could Push Bitcoin Toward $105,000
At the time of writing, BTC is trading at $108,102. If buying volume cannot keep pace with the rising supply, the price risks breaking below its current support level and testing the crucial support zone around $107,745.
A breach of this defense line could see BTC fall through the $105,000 psychological barrier, potentially targeting the $104,709 level.
A resurgence in buyer demand, however, could reverse this downtrend. A revival in buying pressure could propel BTC to break through the $109,304 resistance level, setting up another attempt at challenging its all-time high near $111,917.
Frequently Asked Questions
What does 'Visible Supply turning negative' mean for Bitcoin?
It means the amount of new Bitcoin being sold by miners and long-term holders is exceeding the amount of new Bitcoin being bought by incoming investors. This creates a surplus of supply that can put downward pressure on the price if not balanced by demand.
How does the Long/Short Ratio influence the market?
The Long/Short Ratio is a sentiment indicator from the derivatives market. A ratio below 1 means more traders are betting on the price decreasing than increasing. This can create a self-fulfilling prophecy as selling pressure from short positions can contribute to an actual price drop.
What are the key support levels to watch if the price drops?
The immediate critical support level to watch is around $107,745. If selling pressure intensifies and that level breaks, the next major support test would be the $105,000 zone, followed by a potential move toward $104,709.
Could Bitcoin still reach a new all-time high soon?
Yes, that possibility remains. For a new bullish wave to begin, buyer demand would need to recover strongly enough to push the price above the nearby resistance at $109,304. A decisive break above that level could open the path for a retest of the all-time high near $111,917.
Who are 'Long-Term Holders' (LTHs) and why do they sell?
Long-Term Holders are investors who have held their Bitcoin for a significant period, often more than 155 days. They typically sell to realize profits after strong price rallies or to rebalance their investment portfolios, which can add significant selling pressure to the market.
What is the best way to track these on-chain metrics?
Several analytics platforms provide real-time and historical data on key on-chain metrics like Visible Supply and exchange flows. Monitoring these can give investors insight into underlying market strength or weakness that may not be immediately apparent from the price alone.
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