Bitcoin's Price Breakout Could Hit $83,000 but Faces a Critical Supply Wall

Bitcoin's price has surged by 22% in a week and is nearing another breakout. However, this one looks more precarious than the last, as it relies on real buyers rather than just squeezing out bears. The August 19 breakout saw trapped bears get squeezed, resulting in shorts losing $2.74 billion against $256.66 million in longs.

But now, over 24 hours of Bitcoin liquidations have flipped, with longs losing $310.03 million against $60.77 million in shorts. The crowd has not stepped back despite this flush, as evidenced by the high levels of open interest and the positive funding rate.

The way up is clear at first, but then a supply wall sits where the rally would stall. Glassnode's UTXO Realized Price Distribution (URPD) shows that owners bought in the $82,045 bucket, which holds 83,800 BTC or 0.42% of supply. However, the $84,569 bucket holds roughly 549,200 BTC with the $83,300 band standing first, covering nearly 5% of supply.

These owners sit near break-even, so many may sell into strength. However, seven days of Bitcoin ETF inflows would have to absorb them. Regardless of the buying and selling, the BTC chart marks where that trap would spring.