A popular cryptocurrency analyst explained how the price of Bitcoin could be at risk of further decline based on the current distribution of Bitcoin supply around the price.
This price range for Bitcoin holds a critical supply barrier
at recent days mail On the X platform, prominent cryptocurrency expert Ali Martinez discussed how the price of Bitcoin could suffer further declines. The rationale behind this bearish prediction revolves around the average cost basis of many BTC investors.
Data from IntoTheBlock shows that about 5.45 million addresses purchased approximately 3.03 million Bitcoin within the price range of $64,300 to $70,800. As Martinez explained, this created a critical supply barrier within this price segment.
For context, a supply barrier refers to the price range in which a large amount of cryptocurrency has been acquired. From the size of the dots in the chart below, it appears that Bitcoin currently has a significant supply barrier above it.
A graph showing the distribution of BTC supply around various price ranges | Source: Ali_charts/X
This price range becomes especially important when the price of Bitcoin falls below this level, as Bitcoin holders within the supply barrier may start selling in order to cut their losses. This could lead to intense selling pressure and a possible price correction for the leading cryptocurrency.
Moreover, a widespread dumping and continued decline in prices could negatively impact market sentiment, leading to panic selling among other investors. If the selling pressure is significant, this could increase downward pressure on the Bitcoin price.
As of this writing, Bitcoin's price is around $64,460, reflecting an increase of just 0.2% over the past 24 hours.
Bitcoin miners give up
Typical investors may not be the only category of participants contributing to the selling pressure facing the price of Bitcoin at the moment. The latest reveal on the series shows that Bitcoin miners It has also been active in the market in recent weeks.
According to data from IntoTheBlock, Bitcoin miners have offloaded more than 30,000 Bitcoins (worth approximately $2 billion since June). This represents the fastest rate of decline in BTC miners' reserves in more than a year.
Blockchain analytics linked this sell-off to lower profitability for miners after the recent halving event. The fourth halving event, which occurred in April 2024, saw the miner reward drop from 6.25 BTC to 3.125 BTC.
The price of Bitcoin attempts to cross $65,000 on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView