In a recent analysis posted on the X platform, prominent crypto analyst Ali Martinez discussed the potential downside risk for the Bitcoin price based on the distribution of BTC supply around certain price levels. According to data from IntoTheBlock, approximately 5.45 million addresses acquired around 3.03 million BTC within the price range of $64,300 and $70,800. This accumulation has created a significant supply barrier within this price bracket, indicating a potential resistance level for Bitcoin.
A supply barrier represents a price range where a large amount of cryptocurrency was purchased, as illustrated by the size of the dots in the graph provided. The presence of a supply barrier above the current Bitcoin price suggests that if BTC falls below this level, holders within this range may start selling to minimize their losses. This selling pressure could lead to a cascade effect, causing further downward pressure on the price of Bitcoin.
Moreover, sustained selling and a continuous decline in the Bitcoin price could impact market sentiment, potentially triggering panic selling among other investors. If the selling pressure intensifies, it could contribute to a more significant price correction for Bitcoin. As of the latest update, the Bitcoin price hovers around $64,460, reflecting a marginal increase of 0.2% in the past 24 hours.
Apart from typical investors, Bitcoin miners have also been actively participating in the market, adding to the selling pressure facing the premier cryptocurrency. On-chain data from IntoTheBlock reveals that Bitcoin miners have sold over 30,000 BTC (equivalent to about $2 billion) since June, marking the fastest decline in miners’ reserves in over a year.
The sell-off by miners has been attributed to the reduced profitability following the fourth halving event in April 2024, where the miner’s reward decreased from 6.25 BTC to 3.125 BTC. This adjustment in rewards has forced miners to offload their holdings to maintain operational viability, contributing to the overall selling pressure on the Bitcoin price.
The combination of a significant supply barrier at key price levels and the increased selling activity by Bitcoin miners underscores the potential downside risk for the premier cryptocurrency. If the selling pressure persists and intensifies, it could lead to a more pronounced price correction, impacting market sentiment and investor confidence.
Overall, the current market dynamics suggest a cautious outlook for the Bitcoin price, with key resistance levels and selling pressure from both investors and miners posing challenges for a sustained upward momentum. It remains to be seen how the market will respond to these factors in the coming days and weeks, shaping the trajectory of the cryptocurrency market in the near term.
