According to U.Today, as Bitcoin hovers around the $70,000 mark, analysts are keeping a close eye on a significant supply zone for the leading cryptocurrency. This zone is vital as it signifies a primary area where a large quantity of Bitcoin was procured. Crypto analyst Ali has pinpointed a significant supply zone for Bitcoin, located between $70,180 and $70,600. Over 450,000 addresses have collectively acquired approximately 273,000 BTC in this zone.
The supply zone is a crucial area on the price chart that often serves as a hurdle to upward price movements. It is the place where a substantial number of Bitcoin was previously purchased, and holders may aim to break even or take profits, potentially leading to increased selling pressure.
After a steady recovery from May 1 lows of $56,500, Bitcoin hit highs of $71,980 on May 21 before facing resistance. At the time of writing, BTC was maintaining its declines from the previous day, down 1.91% in the last 24 hours to $69,998.
As Bitcoin nears the highlighted critical supply zone, several scenarios could play out: If Bitcoin manages to break above the $70,600 level with strong volume, it could indicate a continuation of the bullish trend. This could likely attract more buyers, pushing the price higher and potentially establishing a new support level. Conversely, if Bitcoin encounters significant selling pressure within this range, it could lead to a price rejection and subsequent pullback. This scenario would suggest that many holders want to realize profits, resulting in temporary resistance.
Another possibility is that Bitcoin consolidates below this range for a while, implying a balance between buyers and sellers ahead of a significant price movement. As Bitcoin contemplates its next move, price behavior around the $70,000 mark will be closely monitored given the large volume of BTC accumulated in this area. According to the MVRV Pricing Bands, Ali believes that if Bitcoin continues to trade above $65,125, the next local BTC peak before a temporary drop could be around $77,593.