Bitcoin, the leading cryptocurrency, has made headlines again, bouncing nearly 5% from today’s low of around $88,400, right at the edge of a crucial falling-wedge support. This rebound, while notable, reflects a modest 2% uptick on the daily price chart, raising questions about the sustainability of this recovery.
A Falling Wedge Rebound and Rare On-Chain Divergence
The falling wedge has been a consistent factor guiding Bitcoin’s price descent over the past weeks. Today’s bounce reflects the enduring influence of the lower boundary of this wedge, sparking intrigue among traders and analysts. This rebound’s significance is amplified by unusual behavior observed on-chain.
Between November 14 and November 19, Bitcoin experienced a lower low while the SOPR (Spent Output Profit Ratio) recorded a higher low, rising from 0.98 to 0.99. The SOPR metric gauges whether coins being spent were purchased at a profit or a loss. A value below 1 indicates that most traders are selling at a loss, suggesting market pessimism.
This uptick in SOPR, even as prices fell, signals that holder confidence remains intact. Investors are refraining from panic selling, a sign of conviction amid uncertainty.
Heavy Supply Zones Block the Trend Reversal
For the SOPR divergence to translate into a lasting price recovery, Bitcoin must break through key resistance levels. Data from Glassnode’s UTXO Realized Price Distribution (URPD) highlights two critical supply clusters just above the current prices: the first is around $95,900, and the second hovers near $100,900.
These levels are not just random figures—they align with key technical resistance zones that traders monitor closely. Understanding the UTXO Realized Price Distribution helps traders identify strong buying zones where sellers might try to exit their positions, thus serving as potential barriers to further upward movement.
Bitcoin Price Levels That Matter
Bitcoin’s rally hinges on overcoming the first significant resistance at $95,700, a level that has previously stunted recoveries, highlighted by its repeated rejection on November 15. Success at this level could set the stage for challenging the next resistance at $100,200, a target that coincides with both Fibonacci levels and the aforementioned URPD cluster at $100,900.
However, the landscape is not without risks. If the price descends below the recent low at $88,400, there’s a tangible risk for further declines if market sentiment deteriorates.
The interplay between this clean bounce and the on-chain divergence raises the probability of a potential bottom forming. Yet, the critical resistance levels at $95,700 and $100,200 will ultimately determine if Bitcoin is poised for a genuine upward trend or simply experiencing a momentary reprieve.
