Bitcoin: Can BTC Surpass the $96K Threshold? Key Market Indicators Weigh In

As Bitcoin approaches the pivotal $96,000 mark, market analysts are closely monitoring on-chain data and macroeconomic factors to assess whether this level could act as a resistance point. Historical price action, institutional inflows, and miner activity suggest a potential consolidation phase, but volatility remains high. The interplay between ETF demand, regulatory developments, and global liquidity trends will likely determine if BTC breaks through or faces rejection. Traders are advised to watch order book depth and derivatives positioning for clues on market sentiment.

Psychological breakdown

Bitcoin’s rapid price appreciation in Q4 has led to an influx of Short-Term Holders (STHs), who are typically positioned for short-term gains and exit upon price upticks.

Since the invalidation of the $96k support in early February, STH-held supply has undergone marked decumulation, indicative of distribution under stress. 

As illustrated in the chart below, STH Net Unrealized Profit/Loss (NUPL) has shifted into deep negative territory (extreme red). Historically, it has aligned with the early onset of bear market regimes.

Source: Glassnode

With BTC trading persistently below this realized threshold, approximately 3.6 million STH addresses remain in a state of unrealized loss. 

Initially, this may imply a latent bullish setup. 

However, if this holding behavior continues, it could lead STHs to LTHs – a pattern often seen during the late stages of corrections or the beginning of bear markets.

Bitcoin breach of supply zone to trigger profit-taking

These wallets, currently in an unrealized loss state, are positioning for a BTC recovery to either break even or capitalize on potential gains.

Since BTC last tested the $96k resistance two months ago, the prolonged holding period suggests an impending STH-to-LTH transition.

Source: TradingView (BTC/USDT)

Upon a breach of this key resistance, a significant profit-taking event could unfold, with the transition triggering a potential distribution phase.

In response, this distribution phase would amplify downside pressure, potentially catalyzing a full-scale bear market as profit-taking escalates. 

Thus, the longer Bitcoin consolidates below resistance, the more sell-side liquidity accumulates, heightening the risk of a market correction.

Market watchers should remain vigilant.