Bitcoin Tests $108K Support Amid Recovery Challenges from Supply Zones

• UTXO realized price at $108.3k serves as key support for Bitcoin.

• Cost basis distribution reveals significant supply just above current levels, potentially capping upside.

• Liquidation heatmap highlights $116k as a magnetic zone with high reversal potential, backed by CryptoQuant data showing increased whale activity.

Discover Bitcoin’s $108k support level and recovery hurdles in this analysis. Learn why UTXO metrics signal caution for traders amid rising spot volumes. Stay informed on BTC price dynamics.

What is Bitcoin’s UTXO Realized Price and Why Does $108k Matter?

Bitcoin’s UTXO realized price measures the average cost basis of unspent transaction outputs held by different investor cohorts, providing insight into market sentiment and potential support zones. At $108.3k, the 3-6 month band aligns with current prices, indicating where medium-term holders entered the market. This level has historically acted as a strong floor during corrections, as demonstrated by crypto analyst Burak Kesmeci’s examination of on-chain data.

How Does Bitcoin’s Cost Basis Distribution Impact Price Recovery?

The cost basis distribution chart from CryptoQuant illustrates the supply held by addresses with average purchase prices in specific ranges, using color intensity to show volume. Bitcoin’s current position at $108k coincides with a dense supply cluster, where holders may defend or sell based on market momentum. Overhead, a large portion of supply sits at higher cost bases, representing unrealized losses that could trigger break-even sales during any bounce. According to on-chain analytics, this distribution pattern has delayed recoveries in past cycles by 20-30%, as holders prioritize capital preservation over holding through volatility. Expert insights from platforms like Glassnode emphasize that such zones amplify selling pressure, potentially stalling Bitcoin above $110k without fresh institutional inflows.

Bitcoin [BTC] experienced a notable increase in spot trading volume following the liquidation event on October 10th. Data indicates that daily spot volume on major exchanges has stabilized between $5 billion and $10 billion, up from the prior range of $3 billion to $5 billion. This surge reflects heightened trader interest amid price fluctuations.

Additionally, a rise in BTC whale deposits to exchanges has been observed, which may exert downward pressure and complicate short-term recoveries. Despite October’s subdued price action, institutional player Strategy, formerly known as MicroStrategy, continued its accumulation by purchasing Bitcoin worth $18.8 million.

Source: CryptoQuant

The UTXO realized price age bands offer a window into investor behavior by plotting the average cost basis for cohorts based on their entry time into the market. This metric helps identify potential support or resistance by revealing where significant holding groups are positioned relative to current prices.

An in-depth look at the UTXO realized price metric reveals that Bitcoin is currently testing a pivotal support level. Crypto analyst Burak Kesmeci highlighted that BTC prices have stabilized at the 3-6 month UTXO realized price of $108.3k. This alignment suggests medium-term holders are at their breakeven point, which could foster buying interest if sentiment improves. However, sustaining this level will depend on broader market adoption and macroeconomic factors influencing investor confidence.

Frequently Asked Questions

What Factors Make the $108k Level Critical for Bitcoin Holders?

The $108k level is vital as it matches the average cost basis for 3-6 month Bitcoin holders, per CryptoQuant data. This cohort represents a substantial portion of the supply base, often leading to defensive buying to avoid losses. Breaking below could trigger further liquidations, while holding firm may signal accumulation by long-term investors.

How Might On-Chain Data Predict Bitcoin’s Next Price Move?

On-chain metrics like UTXO realized price and cost basis distribution from sources such as CryptoQuant provide clear indicators of holder behavior. For instance, dense supply overhead at $116k suggests potential resistance, where sellers might exit positions. Voice searches for Bitcoin trends often highlight these signals as reliable for anticipating bounces or breakdowns in natural, conversational terms.

Key Takeaways

• $108k as Key Support: This level aligns with the 3-6 month UTXO realized price, offering a psychological and on-chain floor for Bitcoin prices amid recent volatility.
• Recovery Challenges from Supply Zones: Overhead resistance at $116k-$117.5k, visible in liquidation heatmaps from CoinGlass, could attract prices but lead to reversals due to break-even selling.
• Institutional Activity Persists: Despite price dips, entities like Strategy continue buying, with spot volumes rising to $5-10 billion daily, hinting at underlying demand.

A Bitcoin Recovery Could Face Setbacks

Source: CryptoQuant

The cost basis distribution chart maps out the total Bitcoin supply controlled by addresses with cost bases in defined price ranges, with axes representing prices, time, and supply density via color gradients. At present, Bitcoin hovers near $108k, where a concentrated supply band could either bolster support or invite additional selling if breached.

The chart further underscores substantial supply positioned higher up, comprising holders currently underwater on their investments. In a scenario of price uptick, this group might opt to sell at breakeven, thereby impeding sustained recovery and reinforcing the $116k zone as a formidable barrier.

Source: CoinGlass

The liquidation heatmap identifies high-risk zones where leveraged positions cluster, with $116k emerging as a prominent attractor in the near term. While this could draw prices upward initially, these areas frequently serve as reversal points due to cascading liquidations. Absent robust demand, a Bitcoin rebound might exhaust itself around this threshold.

Furthermore, $117.5k stands out as a robust technical resistance, corroborated by historical price action. A rejection here could propel Bitcoin toward lower liquidity areas between $99k and $102k, underscoring the need for vigilant monitoring of on-chain flows and volume trends.

In summary, Bitcoin’s price support at $108k via UTXO realized price metrics offers a temporary respite, yet recovery challenges from cost basis distributions and liquidation heatmaps loom large. As spot volumes rise and institutions like Strategy persist in accumulation, the market’s trajectory hinges on whether buyers can overcome overhead supply. Traders should track these indicators closely for informed decisions in the evolving crypto landscape.