Bitcoin Faces Critical Test at $87K Resistance

Bitcoin's price has been holding steady above $85,000 but has repeatedly faced resistance at the $87,000 mark. Analysts are warning of a potential 8% to 10% correction if the cryptocurrency fails to break through this key resistance level. Niels, one of the analysts, noted that repeated rejections at $87,000 could set the stage for a downside move, although he does not expect a deeper 15% to 20% drop.

As of October 4, Bitcoin was trading near $85,100, showing a modest 0.6% gain over the past 24 hours. The trading volume stood at approximately $12.8 billion. Despite the recent resilience, sellers have been defending the upper range, preventing a sustained breakout above $87,000. This resistance level is significant due to the concentration of liquidity around it, which could trigger short liquidations if breached.

On-chain data suggests that long-term holder activity remains moderate, which is a positive sign for the market. Darkfost from CryptoQuant pointed out that the Coin Days Destroyed metric has decreased, indicating that older coins are not being moved aggressively. This suggests that long-term holders are not yet looking to sell, which could help mitigate downside risks. However, a wallet that had been inactive for over 13 years recently reactivated, moving 801 BTC, though it is unclear if this will lead to selling pressure.

The next critical test for Bitcoin will be its ability to sustain a move above $87,000. A successful breakout could weaken the immediate rejection thesis and trigger leveraged short liquidations. Conversely, another failure to break through this level would leave sellers in control of the range ceiling. Analysts are watching closely to see if Bitcoin can overcome this resistance or if it will retreat, potentially correcting toward $78,000 to $80,000.