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Bitcoin (BTC) continues to hover in the mid-$90,000 range, posting modest gains over the weekend following reports that China has exempted certain US-based products from a 125% tariff rate. However, the leading cryptocurrency now faces a critical resistance level that could determine its near-term price trajectory.
What Do On-Chain Metrics Indicate?
In a recent CryptoQuant Quicktake post, on-chain analyst BorisVest noted that BTC has entered a stagnation phase as short-term holders have begun realizing profits. The contributor warned that if this ongoing profit-taking is not fully absorbed, it could trigger a fresh wave of selling.
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BorisVest also highlighted that BTC exchange reserves – which had been depleting at a significant rate until last week – are now starting to stabilize. As a result, enhanced selling pressure could emerge for the apex cryptocurrency. The analyst added that both BTC inflows and outflows on crypto exchanges are currently balanced, suggesting a neutral market state.
Moreover, while short-term holders were previously selling at a loss, they have now entered profitable territory. The Spent Output Profit Ratio (SOPR) has risen to 1.04, indicating that investors who bought BTC at recent lows – possibly around $76,000 earlier this month – are now cashing out.
For those unfamiliar, SOPR measures the profit or loss of Bitcoin transactions by comparing the price at which coins were originally acquired to the price at which they are now spent. A SOPR value above 1 signals that holders are selling at a profit, while a value below 1 indicates they are selling at a loss.
Additionally, the current SOPR metric reveals increased selling activity with rising prices, suggesting that BTC whales and institutional investors are likely taking profits. The Net Realized Profit and Loss (NRPL) metric supports this view, having sharply rebounded from about $2 billion in realized losses to $3 billion in realized gains.
Bitcoin Faces Critical Resistance – Can BTC Continue Its Rally?
According to the post, Bitcoin now faces significant resistance at $96,000. If BTC manages to break through this level with strong volume and momentum, it could turn this resistance into a new support base and continue its rally.
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Conversely, a failure to decisively break through $96,000 could stall Bitcoin’s rally and potentially trigger a price pullback toward the $80,000 range. Therefore, monitoring BTC’s price behavior around this critical resistance level will be crucial.
That said, Bitcoin’s apparent demand has recently shown a sharp momentum shift, reigniting hopes for a sustained rally that could lead to a new all-time high. At press time, BTC is trading at $93,972, up 0.3% over the past 24 hours.
Featured image from Unsplash, charts from CryptoQuant and Tradingview.com
