Bitcoin Breakout Delayed: Sellers Exhaustion Sets Stage for Recovery!

Bitcoin’s price rally has been momentarily delayed as sellers successfully pushed the price back from a potential breakout level. However, on-chain and chart data overwhelmingly suggest that this pressure is temporary and that selling exhaustion is setting the stage for a strong rebound.

I. On-Chain Data Indicates Seller Capitulation

Two key on-chain metrics point to a significant cooling of selling pressure from both long-term holders and short-term profit-takers: Spent Coins Age Band: The number of coins being sold by both long- and short-term holders has dried up:Long-Term Holders (365 days to 2 years): Sales dropped by 99.6% between October 14 and 22, falling from 25,263 BTC to just 103 spent units.Short-Term Holders (7–30 days): Sales saw a 98.9% fall, from 13,273 BTC to 145 units in a single day.Interpretation: These sharp declines signal that sellers across the board are running out of momentum, leading to selling exhaustion and hinting at a market bottom.MVRV Z-Score: This metric, which compares market value to fair value, rebounded from its 3-month low of 1.90 to 1.96. This established a crucial “higher low” pattern. A similar, smaller higher low pattern in late September preceded a nearly 14% rally in Bitcoin’s price.Interpretation: The MVRV Z-Score suggests that long-term holders are not capitulating but are holding through the dip, providing a stable foundation for a recovery.

II. Technical Setup and Critical Breakout Level

Despite the recent price slip below a key level, the chart pattern remains bullish: Falling Wedge Pattern: Bitcoin continues to trade inside a falling wedge pattern on the 12-hour chart, which is typically a bullish reversal pattern.Bullish Divergence: The Relative Strength Index (RSI) is showing a bullish divergence—Bitcoin’s price made lower lows, but the RSI made higher lows—a classic technical signal that bearish momentum is fading before a trend reversal.Critical Breakout Level: For the rally to confirm, Bitcoin must break and close a candle above $111,500 (the upper boundary of the falling wedge).Upside Targets: A successful breakout could target $114,000, with a strong push opening the path to $116,000 and potentially $124,200.Invalidation: A drop below $107,500 would delay the move, and a slide under $103,500 would invalidate the bullish thesis entirely.

Conclusion

While short-term seller pressure delayed Bitcoin’s immediate breakout, the underlying on-chain data points strongly to a scenario of exhaustion and re-accumulation. The dramatic reduction in selling from both long- and short-term holders, combined with the bullish falling wedge and RSI divergence, suggests the pause is temporary. The long-term bullish outlook remains intact, contingent on the price successfully breaching the critical $111,500 resistance level.

Disclaimer

This article is for informational purposes only and is based on third-party on-chain analysis and technical trading patterns. The information should not be considered financial or investment advice. Technical analysis is not a guarantee of future price action, and the cryptocurrency market is highly volatile. Readers are strongly advised to conduct thorough personal research (DYOR) and consult a qualified financial professional before making any investment decisions.