The recent bitcoin (BTC) price rally above $90,000 has reignited excitement among holders, with many pondering a potential rise beyond the previous high of $109,000 set in January. As the cryptocurrency market fluctuates, it is essential to recognize the challenges that may accompany this upward trajectory.
Recent analysis by Glassnode indicates that the path towards higher valuations may be fraught with difficulties, particularly with increased selling pressure expected around the $99,900 mark. Some market participants may capitalize on this price point, causing potential roadblocks in the market.
Long-term holders (LTHs), characterized by wallets that have retained their coins for a minimum of 155 days, could well decide to lessen their positions at $99,900. This tendency aligns with historical trends indicating that these investors often sell when witnessing a paper gain of approximately 350%.
According to Glassnode, “Historically, LTHs begin distributing more aggressively around a 350% unrealized profit margin, which aligns with a $BTC price of ~$99.9k. As the market nears this level, increased sell-side pressure is likely, requiring strong demand to absorb it.” Thus, as the cryptocurrency approaches this significant threshold, we may encounter increased volatility.
Additionally, another layer of potential selling pressure could emerge from wallets that acquired bitcoins at the beginning of the year, specifically in the range of $95,000 to $98,000. Having endured the downturn to $75,000 last month, some of these holders may be inclined to liquidate their assets at breakeven or for minor profits, aligning with the typical behavioral patterns seen in trading practices.
Glassnode elaborates, “A large cluster of coins was acquired between $95k–$98k, meaning some $BTC holders may exit at breakeven. This, combined with rising LTH profits, creates a key resistance zone.” A decisive breakout past this resistance could potentially pave the way for new price discovery above the $100k mark.
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