A renowned crypto analyst has shed light on a possible downside risk for the Bitcoin price due to the current distribution of BTC supply around its price. Ali Martinez, in a recent post on the X platform, explained how the average cost basis of several BTC investors could lead to further decline in the price of Bitcoin. Data from IntoTheBlock indicated that around 5.45 million addresses bought approximately 3.03 million BTC within the $64,300 to $70,800 price range, creating a critical supply barrier.
Martinez highlighted the significance of a supply barrier, which represents a price range where a large amount of cryptocurrency was acquired. This barrier can become crucial if the Bitcoin price drops below this level, as holders within this range might start selling to minimize their losses. This could result in increased selling pressure and a potentially sharper correction in the price of Bitcoin. Additionally, continuous selling and a price decline could impact market sentiment, leading to panic selling among other investors.
Apart from typical investors, Bitcoin miners have also been contributing to the selling pressure facing the Bitcoin price. On-chain data from IntoTheBlock revealed that Bitcoin miners have sold over 30,000 BTC (worth around $2 billion) since June. This marks the fastest decline in BTC miners’ reserves in over a year. The sell-off was attributed to the reduced profitability of miners following the fourth halving event in April 2024, which reduced their rewards from 6.25 BTC to 3.125 BTC.
As of now, the Bitcoin price is hovering around $64,460, with a slight 0.2% increase over the past 24 hours. The ongoing distribution of BTC supply around various price ranges has created a price barrier that could trigger intensified selling pressure if Bitcoin falls below a certain level. With miners and investors both contributing to the selling pressure, the market sentiment could be negatively influenced, leading to further downward pressure on the price of Bitcoin. It remains to be seen how these factors will play out in the coming days and how they will impact the overall crypto market.
