Bitcoin’s upward momentum faces a significant challenge as on-chain data reveals a massive supply wall of 1.6 million BTC around the $97,200 level. This resistance could prove crucial for Bitcoin’s next price movement.
Understanding the Supply Wall
Market intelligence platform IntoTheBlock has identified a critical resistance zone between $96,400 and $98,400. About 1.6 million addresses hold 1.57 million BTC in this range. These holders are currently underwater on their investments.
This concentration of holdings creates a natural selling pressure. Investors often try to exit their positions when prices return to their entry points. The size of this supply wall makes it particularly significant.
Support Levels and Market Structure
Below the current price, Bitcoin has established support between $93,400 and $96,200. However, this support zone contains less supply than the resistance above. This suggests the support might be weaker than the overhead resistance.
If Bitcoin breaks below this support, the next significant levels don’t appear until $81,800. The path downward shows relatively thin support walls.
Market Implications
The current market structure suggests several possible scenarios:
- A successful break above $98,400 could trigger a significant rally
- Rejection at the resistance might lead to a retest of lower support levels
- Extended consolidation between support and resistance is possible
Trading Volume and Price Action
Bitcoin currently trades around $96,000, showing a 2% decline in the last 24 hours. The price action suggests a temporary equilibrium between buyers and sellers.
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The presence of such a significant supply wall suggests traders should exercise caution. Risk management becomes crucial when trading near major resistance levels.
Tags: Bitcoin, Market Analysis, Resistance Levels, Trading Strategy, On-chain Analysis
Source: NewsBTC