Unlocking the Mystery: 3 Reasons Bitcoin Price Can’t Conquer $90K Resistance

Bitcoin’s journey towards the coveted $100,000 mark has hit a snag, struggling to decisively break through the formidable $90,000 resistance level. After an impressive climb, the king of crypto is facing headwinds, leaving investors wondering: What’s preventing Bitcoin from smashing through this ceiling? Let’s dive into the critical factors holding back the Bitcoin price and explore why this $90K barrier remains so tough to overcome.

1. Top-Heavy Market and Persistent Sell-Side Pressure Impacting Bitcoin Price

One significant reason for Bitcoin’s current price stagnation is the overwhelming sell pressure originating from short-term holders (STHs). These investors, who have held their Bitcoin for less than 155 days, are playing a crucial role in shaping the current market dynamics. Recent analysis reveals a ‘top-heavy’ market structure, meaning a large portion of Bitcoin’s supply is held by investors who bought in at higher price points.

This situation creates a scenario where STHs, facing considerable losses since Bitcoin’s recent correction from its all-time high, are contributing to continuous selling pressure. According to Glassnode’s insightful report, the volume of Short-Term Holder supply currently in loss has surged to a massive 3.4 million BTC – a level not seen since July 2018. This substantial amount of Bitcoin held at a loss by short-term investors naturally translates into increased sell orders whenever the price attempts to rally, hindering any sustained upward momentum for Bitcoin price.

2. Liquidity Contraction Dampening Bitcoin’s Momentum

Another critical factor impeding Bitcoin’s ascent past $90,000 is the noticeable contraction in market liquidity. Reduced liquidity essentially means fewer buy and sell orders are being placed, making it harder for large trades to be executed without significantly impacting the price. Data points to a substantial 47% decrease in on-chain transfer volumes, dropping to $5.2 billion daily from the peaks observed during the rally to all-time highs.

Furthermore, the number of active addresses has declined by 18%, falling from 950,000 in November 2024 to 780,000. Open interest in Bitcoin futures markets has also shrunk by 24%, accompanied by a cooling down of perpetual futures funding rates. This overall deleveraging and liquidity contraction creates a less robust market environment. With fewer participants actively trading and reduced capital flowing in, the market’s capacity to absorb sell orders and propel the price beyond the $90K resistance is significantly limited. In essence, the fuel needed for a strong upward surge is currently lacking.

3. Absence of New Demand Hindering Bitcoin’s Breakout

Perhaps one of the most concerning reasons behind Bitcoin’s inability to overcome the $90K barrier is the apparent lack of fresh demand entering the market. While existing holders, particularly long-term holders, remain steadfast, the influx of new buyers seems to have slowed down considerably.

Glassnode’s Cost Basis Distribution (CBD) Heatmap highlights this point, revealing a concentration of supply at higher price levels (between $100,000 and $108,000). However, crucially, it shows no corresponding significant increase in buyers at lower price levels that would typically drive a price recovery. This absence of new demand is further exacerbated by prevailing macroeconomic uncertainties, which tend to deter new investors from entering the volatile cryptocurrency market. The shift to net capital outflows when short-term cost basis fell below longer-term cost basis further underscores this cautious sentiment among potential new entrants. Without a fresh wave of buyers injecting new capital, the upward pressure needed to decisively break through the $90K resistance and establish new highs remains elusive.

Is There Hope for a Bitcoin Price Reversal?

Despite these challenges, it’s not all doom and gloom for Bitcoin. Glassnode analysts offer a glimmer of hope, pointing out that long-term holders still maintain a substantial portion of the network’s wealth, holding almost 40% of the invested value. These periods of prolonged accumulation by long-term holders can eventually lead to a supply squeeze. As the available Bitcoin supply on exchanges decreases due to long-term holding, any resurgence in demand could trigger a significant price increase.

Essentially, while the market analysis currently points to reasons for caution and price resistance, the underlying strength of long-term holder conviction and the potential for future demand surges suggest that the $90K resistance, while formidable, may not be insurmountable in the long run. The crypto market is known for its cyclical nature, and patience, coupled with a shift in market sentiment, could pave the way for Bitcoin to eventually conquer this hurdle and aim for new heights.

Disclaimer: This analysis is for informational purposes only and not financial advice. Cryptocurrency investments are risky, and you should conduct your own research before making any decisions.