Bitcoin Faces Key Resistance as $4.7B in Sell-Side Liquidity Mounts

Bitcoin is attempting to stabilize above the crucial $90,000 level after struggling to break through the $94,000 resistance. Despite some bullish sentiment, the overall market remains weak, with increasing sell-side liquidity signaling potential challenges ahead. An analysis of on-chain data reveals significant inflows into exchanges, raising concerns about market dynamics. The next moves for Bitcoin will depend heavily on its ability to hold above $90,000 and overcome key resistance levels.

Key Takeaways

Bitcoin is currently testing the essential technical resistance near $94,000 while managing to stay above $90,000.
A total of $4.7 billion in potential sell-side liquidity indicates strong selling pressure.
On-chain analysis shows significant inflows of Bitcoin and Ethereum to exchanges, suggesting that large holders may be preparing to sell.
The Relative Strength Index (RSI) indicates improving bullish momentum, but this is tempered by cautious on-chain signals.
The market's ability to maintain positions above critical levels will be pivotal in shaping Bitcoin's next moves.

Bitcoin’s Struggle with Resistance

Bitcoin has been finding it difficult to surpass the $94,000 mark and is currently trying to stabilize above $90,000, an area that is crucial for its short-term structure. While bullish traders are making efforts to protect recent gains, the overall market remains delicate, facing various risk factors that limit confidence in potential upward movement. The price action signifies a market caught between relief-driven buying and ongoing selling pressure near significant resistance levels.

A recent analysis from CryptoQuant points out that Bitcoin is on the verge of testing an important technical and on-chain convergence. Over the daily time frame, BTC has shown a robust rebound from the Point of Control (POC) around $85,000, a region that previously held substantial trading volume. This recovery has pushed the price back into the supply zone of $92,000–$94,000, which has consistently attracted sellers.

Concerns Over Increased Sell-Side Risks

According to the report, Bitcoin is trading just under a major technical resistance area identified as a key supply zone. The price has entered this region multiple times, yet each attempt lacked the necessary conviction for a clear breakout. Historically, when Bitcoin struggles to decisively overcome such resistance, it often leads to a liquidity sweep toward lower levels, targeting areas where demand remains unfulfilled.

Binance 7-Day Asset Netflow by Network | Source: CryptoQuant

Recent on-chain data corroborates this technical caution. Analysis of Binance's exchange netflow over the past week reveals significant asset movement onto the exchange. Bitcoin's net inflows reached around $3.6 billion, while Ethereum saw an influx of about $1.15 billion. Together, this represents nearly $4.75 billion potentially exerting sell-side pressure in a short period.

This situation creates a clear divergence; although price action hints at a break higher, the rapid increase in exchange reserves suggests a different underlying trend. Large holders and institutions might be positioning to sell into strength or establish short positions near resistance, rather than supporting a sustainable upward trend.

The timing of these factors is crucial. With substantial inflows coinciding with Bitcoin testing the $92,000–$94,000 range, the risk appears skewed to the downside in the short term. Unless buyers can manage to absorb this supply and secure a strong close above the $94,000 mark, the odds of a setback towards the $85,000 POC remain heightened.

BTC consolidates above key demand level | Source: BTCUSDT chart on TradingView

Trend Analysis

From a trend perspective, Bitcoin is still trading below the weekly 50-period moving average, which now functions as a dynamic resistance in the mid-$90,000s. This level has thus far capped upward attempts, indicating that bulls have yet to fully regain control. Meanwhile, the weekly 100-period moving average continues to incline upward well below the current price, suggesting that the broader macro trend remains supportive, despite recent corrections.

Price movements over the past few weeks indicate the formation of higher lows near the $85,000–$88,000 area, showing that buyers are stepping in during declines. However, volume has decreased compared to the distribution phase around the highs, which is typical during periods of consolidation, indicating easing selling pressure.

Nevertheless, the market structure remains delicate. A failure to reclaim and maintain positions above the $95,000–$98,000 range could keep Bitcoin trapped in a broader corrective phase. Conversely, a decisive weekly close above the 50-week moving average could enhance the technical outlook and raise the likelihood of a renewed move toward the $105,000–$110,000 range.

Featured image from ChatGPT, chart from TradingView.com.