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Bitcoin surged to $107,000 on Sunday before quickly retracting, unsettling investor confidence and instigating new volatility throughout the market. The movement, which many anticipated would facilitate a clear breakout into price exploration, instead reaffirmed the ongoing consolidation range between $100K and $105K. Analysts remain at odds — some perceive this as a healthy pause before a greater push, while others caution of a more profound correction if BTC falls below the $100K support.
As the market processes this pullback, on-chain analytics provide an essential element to the narrative. According to CryptoQuant, the supply held by Long-Term Holders (characterized as wallets retaining BTC for 18 months to 3 years) has decreased by over 2 million BTC since November 2023. This significant distribution wave indicates that long-term participants have been gradually realizing profits as prices ascended to new heights. While this doesn’t ensure a crash, it does underscore the necessity for robust demand from new entrants, including institutions, to absorb the selling pressure.
With the price coiling above $100K and significant resistance looming close to ATH, the forthcoming decisive action could establish the trajectory for Bitcoin as it moves into the summer.
Long-Term Holders Step Back As Bitcoin Struggles For Momentum
Bitcoin is presently at a crucial juncture, with bulls striving to uphold the vital $100,000 support zone. Following Sunday’s unsuccessful breakout at $107,000, the price has retreated into familiar terrain, exasperating investors who expected a shift into price exploration. While some regard this as a typical consolidation before the next upward leg, others worry a deeper retracement could be imminent if BTC forfeits the $100K floor.
The market encounters evident resistance between $105K and the all-time high near $109K — a liquidity zone that could incite aggressive buying if breached. However, the recent rejection indicates that sellers maintain influence at elevated levels, and short-term volatility may escalate as the battle between bulls and bears intensifies.
Compounding this uncertainty is the behavior of long-term holders. Analyst Axel Adler disclosed that since November 2023, wallets containing BTC for between 18 months and 3 years have unloaded over 2 million BTC — approximately $138 billion in value. This considerable distribution wave likely fueled a significant portion of the recent rally, but it also raises alarms. Adler highlights that this group still possesses about 500,000 BTC that could be offloaded later this year, potentially exerting additional pressure during weak moments.
While institutional demand may absorb some of this impending supply, with the corporate sector reviving interest, the broader market must proceed with caution. As price consolidates, investor sentiment teeters on a knife edge. Whether bulls can reclaim higher levels or a more extensive correction materializes will hinge on Bitcoin’s response to the current stress test at $100K.
Price Action Insights: Bulls Attempt To Regain Momentum
Bitcoin is exhibiting signs of renewed vigor as it trades at $105,389, seeking to breach recent resistance around the $106K–$107K region. This level has constrained previous rallies, and regaining it would indicate a bullish continuation toward all-time highs. The price has successfully defended the $100K psychological support, which now serves as a robust demand zone, bolstered by the 200-day SMA currently around $92,994 and the 200-day EMA near $88,664.
Volume seems to be slightly diminishing compared to the surge earlier this month, indicating some reluctance among bulls. Nevertheless, the structure remains intact: a robust breakout from April lows has established a steep and well-defined uptrend. The consolidation just beneath resistance could develop into a bullish flag if the $107K ceiling is surpassed with considerable volume.
A failed effort to maintain levels above $103,600 could prompt another test of the $100K support, where bulls must hold firm to avert deeper retracements. On the upside, overcoming $107K paves the way to $109K and into price exploration. This week’s closure will be pivotal — a strong candle above $106K could set the stage for the next macro movement upwards.
Featured image from Dall-E, chart from TradingView
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