Bitcoin Holds Above $108,000 Amid Key Support Levels

Bitcoin is currently trading just above the $108,000 mark, with bulls maintaining momentum despite a volatile start to July. However, a detailed examination of on-chain data reveals the fragility of this position. Two critical support levels, $106,738 and $98,566, have emerged as pivotal zones for bulls to defend. These levels correspond to clusters of addresses holding significant amounts of Bitcoin, and a breach of these levels could trigger a deeper correction.

Crypto analyst Ali Martinez highlighted these support levels based on data showing Bitcoin’s purchase clusters. This data is derived from the In/Out of the Money Around Price metric, which tracks addresses that bought Bitcoin near the current price. According to this metric, the most significant current purchase zones are at $106,738 and $98,566. These zones have seen substantial buying activity in recent weeks and could provide support in the event of a price crash.

The first zone, ranging from $104,982 to $108,190, includes 1.68 million addresses holding a total of 1.28 million BTC at an average price of $106,738. Below this zone, a larger group of 1.71 million addresses holds 1.25 million BTC within the price range of $95,248 to $98,566, with an average price of $98,566. As long as Bitcoin continues to trade above these levels, the ongoing rally could sustain its upward momentum. However, if these demand pockets are breached with sufficient selling pressure, Bitcoin could enter a price zone with little buying interest, leading to uncertainty.

On-chain data also indicates a slowing sell pressure among large holders. According to data from an on-chain analytics platform, Bitcoin recorded its fifth consecutive week of net outflows from centralized exchanges. The past week alone saw over $920 million worth of BTC moved into self-custody or institutional products, primarily Spot Bitcoin ETFs. This trend suggests that large holders are increasingly opting for long-term holding strategies, which could support Bitcoin’s price in the long run.

Despite the solid demand zones beneath, Bitcoin’s path to new highs is not yet confirmed. Analyst Rekt Capital noted that Bitcoin is currently facing a strong weekly resistance band just under $109,000. Specifically, Bitcoin is at risk of forming a lower high structure on the weekly candlestick timeframe chart. Rekt Capital emphasized that a weekly close above the red horizontal resistance line, currently around $108,890, is necessary for Bitcoin to reclaim a more bullish stance. This resistance level is acting as a ceiling for Bitcoin’s upward rally.

Therefore, Bitcoin needs to achieve a weekly close above $108,890 to position itself for new all-time highs. Without a convincing break of this level, Bitcoin’s price action could remain erratic and susceptible to a retracement to $106,000. At the time of writing, Bitcoin is trading at $108,160, highlighting the delicate balance between bullish momentum and potential downside risks.