As Bitcoin nears $70,000, analysts are closely monitoring a critical supply zone for the largest cryptocurrency. This range is crucial because it represents an area where a substantial amount of Bitcoin has been acquired.
Crypto analyst Ali has identified a key supply zone for Bitcoin, located between $70,180 and $70,600, where more than 450,000 addresses have collectively acquired approximately 273,000 BTC.
The supply zone is an important area on the price chart that often acts as an obstacle to upward price movements. This is where a large number of Bitcoins have been previously purchased, and holders might look to break even or realize profits, potentially leading to increased selling pressure.
Following a steady rebound from the May 1 low of $56,500, Bitcoin reached a peak of $71,980 on May 21 before encountering resistance. At the time of writing, BTC was maintaining its decline from the previous day, down 1.91% over the past 24 hours at $69,998.
Potential Scenarios
As Bitcoin approaches the highlighted critical supply zone, several scenarios could unfold:
Continuation of the Uptrend: If Bitcoin manages to surpass the $70,600 level with signipotentialsume, it could signal the continuation of the bullish trend. This would likely attract additional buyers, pushing the price higher and potentially establishing a new support level.
Price Rejection and Pullback: Conversely, if Bitcoin faces substantial selling pressure within this range, it could lead to a price rejection and subsequent pullback. This scenario would suggest that many holders are looking to take profits, resulting in temporary resistance.
Consolidation Below the Range: Another possibility is that Bitcoin consolidates below this range for a period. This would imply a balance between buyers and sellers before a major price movement.
As Bitcoin contemplates its next move, price behavior around the $70,000 mark will be closely watched given the significant volume of BTC accumulated in this area.
Based on MVRV price bands, Ali estimates that if Bitcoin continues to trade above $65,125, the next local BTC peak will occur before a temporary decline around $77,593.