Bitcoin Hits a Roadblock at a Key Level That Capped Its January Rally, According to CryptoQuant

The upward trajectory of Bitcoin towards $75,000 is encountering significant resistance due to a surge in supply, even as institutional demand remains steady. The recent price increase has been primarily fueled by macroeconomic factors rather than speculative activity. U.S.-listed spot Bitcoin ETFs have seen consistent inflows, including a notable $240 million in a single session following Middle East geopolitical tensions, as reported by market maker Enflux. This demand has helped push BTC from around $71,000 to the mid-$70,000s, despite traditional markets facing challenges from rising oil prices and shifting interest rate expectations. Enflux notes that this pattern reflects allocation behavior rather than investors chasing momentum. However, as Bitcoin's price rises, the market's dynamics are beginning to shift. On-chain data suggests that supply is becoming more aggressive as prices approach a key cost-basis level for short-term holders, around $76,800, which is the average entry point for traders who accumulated Bitcoin during the last phase of the drawdown, according to CryptoQuant. Historically, this level has acted as resistance in weaker market conditions, as investors who were previously at a loss use rallies as an opportunity to exit at breakeven. Notably, this same level capped the bounce in January almost to the dollar before prices reversed towards $60,000. CryptoQuant observed that Bitcoin exchange inflows spiked to approximately 11,000 BTC per hour, the highest since late December, as prices tested the $75,000 to $76,000 range. At the same time, the average deposit size increased to about 2.25 BTC, the highest daily reading since mid-2024, indicating that larger holders are driving this movement. The share of large transfers jumped from below 10% to above 40% of total inflows within days, a shift that has historically coincided with increased distribution pressure, according to the firm. This sets up a two-sided market, where on one side, ETF flows and macro tailwinds continue to provide a steady source of demand, and on the other, large holders appear to be using the rally to reduce their exposure, feeding liquidity into the market as prices approach a widely watched breakeven zone. The resulting scenario is less of a standoff and more of a handoff, where long-term holders seem to be distributing coins directly into ETF demand. The exchange inflows flagged by CryptoQuant and the ETF inflows tracked by Enflux are, in effect, two sides of the same transaction, visible in different datasets. Whether this handoff is successful depends on whether the new holders prove to be more committed than those exiting. This is a late-cycle pattern that can resolve in one of two ways. The outcome is a market that can quickly move higher on inflows but struggles to sustain those gains once supply builds. A sustained break above the mid-$70,000s would likely require demand to absorb a growing wave of sell pressure. Failing that, the balance could tilt the other way, leaving Bitcoin vulnerable to a pullback towards the low-$70,000s, where the latest leg of the rally began.