Bitcoin Faces Resistance at Key Level as Large Holders Prepare to Sell

The recent bitcoin rally to $75,000 is encountering significant resistance due to a surge in supply, even as institutional demand remains steady. This upward move has been primarily driven by macroeconomic factors rather than speculative activity, with U.S.-listed spot bitcoin ETFs experiencing consistent inflows, including a notable $240 million influx following Middle East geopolitical tensions. The market maker Enflux notes that this pattern reflects allocation behavior rather than momentum chasing. However, as bitcoin prices rise, the market dynamics are shifting. On-chain data from CryptoQuant suggests that supply is increasing more aggressively as prices approach a critical cost-basis level for short-term holders, around $76,800, which has historically acted as resistance. This level has previously capped rallies, including in January, before prices reversed. CryptoQuant observed a spike in bitcoin exchange inflows to approximately 11,000 BTC per hour, the highest since late December, as prices tested the $75,000 to $76,000 range. The average deposit size also rose to about 2.25 BTC, the highest daily reading since mid-2024, indicating that larger holders are driving this move. The share of large transfers increased significantly, a shift that has historically coincided with increased distribution pressure. This sets up a two-sided market, with ETF flows and macro tailwinds providing demand on one side, while large holders appear to be reducing exposure on the other. Essentially, long-term holders seem to be distributing coins directly into ETF demand, which could lead to a handoff. Whether this handoff is successful depends on the stickiness of the new holders. This late-cycle pattern can resolve in one of two ways, resulting in a market that can move higher quickly on inflows but struggles to sustain 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 toward the low-$70,000s.