Bitcoin's Supply Surge: A Tipping Point for Bulls or Bears?

Bitcoin's supply trends in 2021 have mirrored those of the previous year, with a significant influx of supply leading to increased sensitivity among investors to any downward movement. If BTC fails to maintain support above $92,500, short-term holders may start offloading their assets, exacerbating selling pressure. However, sustained buy pressure could establish a new range above its all-time highs. Historically, post-ATH phases have led to widespread panic among new entrants, particularly those who recently accumulated BTC at peak prices. If their holdings slip into unrealized losses, it may prompt a wave of distribution, increasing the chances of a sharp price decline.

The RHODL Ratio, which measures the balance between mid-cycle holders (6 months to 2 years) and new entrants (1 day to 3 months), has been declining. This trend suggests that short-term speculation is rising, a common indicator observed before market tops. While the ratio is not yet at extreme lows, its current movement aligns with patterns seen in the latter stages of previous bull cycles. A further drop in the RHODL Ratio could signal an impending correction. Historically, when the ratio rebounds after hitting a low, it has marked key turning points in Bitcoin’s price cycles. If this pattern repeats, Bitcoin may enter a distribution phase before stabilizing or initiating another upward movement.

Bitcoin price is currently consolidating between $98,212 and $95,761 and is at risk of a decline. Multiple tests of the lower support indicate that BTC remains susceptible to another retest. Should this level fail to hold, Bitcoin could face increased selling pressure, leading to a sharper decline. Given the ongoing macro trends and STH supply distribution, Bitcoin’s price may see a correction in the short term. A drop to $93,625 is plausible, and if bearish momentum intensifies, BTC could decline further to $92,005. These levels could act as critical support zones, influencing the next market movement.

On the other hand, continued accumulation by investors with a long-term outlook could provide Bitcoin with the necessary support to break through $98,212. If BTC successfully reclaims $100,000, bullish momentum could accelerate, propelling the cryptocurrency toward its all-time high of $105,000.