A popular crypto analyst has explained how the price of bitcoin could be at risk of further decline based on the current distribution of btc supply around the price.
This bitcoin Price Range Has a Critical Supply Barrier
In a recent x.com/ali_charts/status/1804448672647618789″ target=”_blank” rel=”noopener nofollow”>mail On platform The reason behind this bearish projection revolves around the average cost basis of various btc investors.
IntoTheBlock data shows that around 5.45 million addresses purchased approximately 3.03 million btc within the price range of $64,300 and $70,800. As Martínez highlighted, this has led to the formation of a crucial supply barrier within this price range.
For context, a supply barrier refers to a price range at which a large amount of cryptocurrency was purchased. From the size of the dots on the chart below, it appears that bitcoin currently has a significant supply barrier above it.
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A graph showing the distribution of btc supply around various price ranges | Source: x.com/ali_charts/status/1804448672647618789" target="_blank" rel="noopener nofollow">Ali_charts/x
This price range becomes especially relevant when the price of bitcoin falls below this level, as btc holders within the supply barrier could begin selling to reduce their losses. This could intensify selling pressure and potentially a steeper price correction for the top cryptocurrency.
Furthermore, a large-scale dump and continued price decline could negatively influence market sentiment, causing panic selling among other investors. If the selling pressure is significant, this could increase the downward pressure on the btc price.
At the time of writing, the price of bitcoin is around $64,460, reflecting an increase of just 0.2% in the last 24 hours.
bitcoin miners are capitulating
Typical investors may not be the only class of participants contributing to the selling pressure facing bitcoin price right now. The latest chain revelation shows that the bitcoin-news/survival-of-the-fittest-heres-how-bitcoins-next-rally-hangs-on-miner-capitulation/” target=”_blank” rel=”noopener nofollow”>bitcoin miners They have also been active on the market in recent weeks.
According to data from x.com/intotheblock/status/1804545269008138479″ target=”_blank” rel=”noopener nofollow”>In the block, bitcoin miners have downloaded over 30,000 btc (valued at approximately $2 billion since June). This represents the fastest rate of decline in btc miners' reserves in over a year.
Blockchain analyzes linked this liquidation to the reduction in miners' profitability after the recent halving. The fourth halving event, which occurred in April 2024, saw the miner reward drop from 6.25 btc to 3.125 btc.
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The price of bitcoin attempts to cross $65,000 on the daily timeframe | Source: BTCUSDT chart on x/Dh4Uoqpc/" target="_blank" rel="noopener nofollow">TradingView
Featured image from iStock, chart from TradingView