Bitcoin's Rally Hits Wall: Can It Clear Key Resistance Levels?

Bitcoin's rapid price increase from under $65,000 to over $82,000 within weeks has come to a halt, according to CryptoQuant. Despite this setback, analysts at CryptoQuant remain bullish on Bitcoin, but with one critical condition: clearing key technical and on-chain resistance levels.

The weekly report by CryptoQuant identifies Bitcoin's 365-day moving average of $81,700 as the most important level for the asset. Historically, bull markets have begun once Bitcoin closes above this moving average. A successful close above $81,700 could confirm a new bullish phase and open the door for another major leg up.

However, if Bitcoin fails to break through this level, it could lead to a longer consolidation phase or even a more profound decline. On the downside, there are other resistance levels to contend with, including the 3x Metcalfe valuation band at $83,600 and the trader-realized-price upper band at $88,700.

The most immediate problem for Bitcoin is its inability to absorb the heavy on-chain supply wall created by long-term holders who sold approximately 539,000 units between $77,100 and $80,200 throughout the year. To make another convincing attempt north, Bitcoin would need to clear this supply before tackling the next resistance levels.