Bitcoin (BTC) Price Faces a Critical Moment as On-Chain Data Shows the Cryptocurrency Trading Between Important Supply Zones

Bitcoin price is currently hanging between two massive on-chain supply zones and a key macro support level as it faces a critical decision point, according to on-chain analyst Checkmate.

After failing to stay above the $96,500 zone, Bitcoin has been rolling lower and lower. The cryptocurrency started a new correction that took it below several key support levels.

Specifically, the price decreased beneath $96,200 and $95,500 before even dropping below $94,500.

This correction led Bitcoin as low as $93,570. Since then, it has been trying to recover some of these losses but continues to encounter strong resistance.

“In my view, it’s pretty important that Bitcoin clears this price zone in the near-term. We’re sitting right in the middle of a decision point, and all it will take is one big red or green candle from here to convince people of a lower high, or bull continuation, respectively,” said Checkmate.

This observation is based on the UTXO Realized Price Distribution (URPD), which showcases two enormous supply clusters around the current price levels.

This metric highlights what portion of Bitcoin’s supply was last purchased at different price points throughout its history. The data demonstrates dense supply zones both above and below Bitcoin’s present trading range.

The lower supply zone, which ranges from roughly $88,000 to $93,000, holds a substantial amount of Bitcoin supply. If this zone provides support, it might be due to investors who bought in this area still being in profit. They may defend this level to prevent further price drops.

On the other hand, the upper supply wall, spanning from approximately $93,000 to $98,000, also contains a dense portion of the cryptocurrency’s supply. If this zone acts as resistance, it could be because investors who acquired Bitcoin at these higher prices might sell their holdings to break even if the price approaches their entry point.

At the same time, the price is approaching another important macro on-chain support level: the short-term holder Realized Price, highlighted by CryptoQuant analyst Maartunn. This level stands at around $93,364.

The short-term holder Realized Price represents the average cost basis for investors who bought Bitcoin within the past 155 days. It's a measure frequently used by analysts to identify potential price trends and significant support or resistance zones.

Historically, this metric has served as a boundary between bullish and bearish market trends. For instance, during previous market cycles, when Bitcoin price dropped below the short-term holder Realized Price, it typically continued its downward movement. Conversely, bouncing off this level in the past signaled bullish continuation.

Technical Analysis Shows Challenging Path Ahead

On the technical front, Bitcoin is trading below the 100 hourly Simple Moving Average, which usually signals bearish momentum in the short term. A bearish trend line has also formed, offering resistance around $94,750 on the hourly chart.

If Bitcoin manages to break through the $94,750 resistance zone, it might encounter further obstacles at $95,300 and then at $95,750. The latter level coincides with the 50% Fibonacci retracement level of the recent decline from $97,885 to $93,570.

A successful breakthrough above $95,750 could potentially open the path toward $96,800. Any sustained momentum beyond this point might push Bitcoin toward the crucial $98,000 zone.

However, if Bitcoin fails to overcome the $94,750 resistance, it could continue decreasing. In such a scenario, immediate support would be found near $93,750, followed by more substantial support at $93,500.

If these support levels fail to hold, the price might drop further toward $93,200 or even test the $92,500 zone. The main support level sits at $91,200, which would likely attract significant buying interest.

At the time of writing, Bitcoin is trading around $94,000, down about 1.5% over the last 24 hours. The price has been rolling lower over the last few days as bulls struggle to return.

It appears that the cryptocurrency’s fate now hangs in the balance as it’s massively over-sold on lower time frames. As Checkmate noted, “all it will take is one big red or green candle from here to convince people of a lower high, or bull continuation, respectively.”

This current price action comes after Bitcoin hit new all-time highs earlier this year. As such, market participants are keeping a close eye on this latest move