Bitcoin’s Rally Faces Supply Challenges
Even as institutional interest remains stable, Bitcoin’s climb toward $75,000 is encountering significant supply obstacles.
This uptrend is largely fueled by macroeconomic factors, rather than widespread speculative trading. Notably, the U.S.-listed Spot Bitcoin ETF has experienced steady inflows this month, including a substantial $240 million trade, spurred by geopolitical tensions in the Middle East, as reported by the market maker Enflux.
This activity has helped lift Bitcoin from approximately $71,000 to around the mid-$70,000 range, despite traditional markets grappling with rising oil prices and shifts in interest rate forecasts. Enflux pointed out that this development seems driven by allocation trends rather than frantic momentum trading.
Yet, as Bitcoin appreciates, the market dynamics appear to be shifting.
On-chain analytics indicate that supply is increasingly emerging as prices climb near key levels significant to short-term holders. As per CryptoQuant, around $76,800 marks the realized price for recent buyers, which essentially serves as the average entry point for traders who came aboard toward the end of the previous decline. In weaker market conditions, this price often acts as a resistance level, as those who were previously losing take advantage of the rally to exit at break-even.
It’s worth noting that a similar price zone capped gains back in January, just shy of $100,000, before the market reversed toward $60,000.
CryptoQuant also highlighted that inflows to Bitcoin exchanges surged to about 11,000 BTC per hour, the highest since late December, as prices hovered around the $75,000 to $76,000 range.
Concurrently, average deposits climbed to about 2.25 BTC, representing the highest daily figure since mid-2024, suggesting significant participation from large holders in this upward movement. The proportion of large transactions soared from under 10% of total inflows to over 40% in a matter of days, a shift historically linked to increased selling pressure.
This scenario presents a market with dual forces at play.
ETF inflows and macroeconomic support still offer a reliable source of demand. At the same time, it seems large holders are taking advantage of the price increase to reduce their exposure and inject liquidity into the market as prices approach the closely watched break-even threshold.
What seemed more like a transfer of assets than a clash is playing out. It appears long-term holders are reallocating coins directly to meet ETF demand. The inflows tracked by CryptoQuant and ETF flows monitored by Enflux represent essentially two sides of the same phenomenon, observable across different datasets.
The outcome of this dynamic hinges on whether the new holders exhibit greater persistence than those looking to cash out. This late-cycle behavior typically resolves in one of two paths.
Consequently, while the market can rise quickly in response to inflows, it struggles to maintain that momentum as supply increases. For prices to move sustainably beyond the mid-$70,000s, demand will need to counterbalance a growing wave of selling. If that doesn’t materialize, the balance may tip, potentially causing Bitcoin to retreat toward the low $70,000 range, where the latest rally initiated, according to CryptoQuant.
