Bitcoin is trading around $84,038 after briefly tapping a high of $87,220 during the October 2 trading session. The subsequent pullback is more than just an ordinary correction - a massive supply barrier stands directly in the path to higher levels.
According to the latest analysis from the Bitfinex research team, around 1.39 million BTC had a cost basis in the $84,000 to $86,500 price range as of September 30. This coin cluster functions as trapped overhead supply. For traders, the heavy volume in that price band turns into a formidable barrier each time buyers try to push the market higher into profitable territory.
Macroeconomic conditions have also influenced price action. The U.S. jobs report for September recorded 29,000 payrolls added - falling drastically short of market forecasts targeting 90,000. That sharp miss triggered more than $120 million in short liquidations within 24 hours. The resulting wave of forced buy-ins briefly launched Bitcoin toward the $87,000 mark before momentum faded.
Crucial Condition for Further Upside
Bitfinex highlighted a central requirement for any buying momentum to endure. The largest cryptocurrency must consistently hold above the $86,500 level. Merely touching that threshold and quickly retreating is insufficient to decisively shift market structure.
If Bitcoin breaks through and secures a firm foothold above $86,500, the next target awaits at $87,722. That level aligns with Bitcoin’s yearly open, which frequently serves as a key benchmark for fresh capital entering the market.
From a daily supply and demand perspective, market activity still carries potential for an extended upward move. The Bitfinex Absorption-to-Emission Ratio (BAER) surged again to nearly five times Bitcoin’s daily issuance rate. Such robust absorption of newly minted coins outpacing daily emission is considered supportive of the broader trend, provided it remains steady over the coming days.
U.S. institutional fund flows are also pointing toward a turnaround. After logging roughly $149 million in outflows on September 30, spot Bitcoin ETF products saw renewed buying appetite, posting $170.2 million in net inflows on October 1.
Downside Risks Loom
Amid attempts to clear overhead resistance, the danger of a downward shift still hangs over the market. Analysts caution that market structure will face deterioration if Bitcoin slips and holds below $81,300. That downside threat would intensify significantly if paired with consecutive outflows from ETF products.
Momentum indicators illustrate an ongoing two-way tug of war. The daily Relative Strength Index (RSI) stands at 60.69 - still above the neutral 50 line. However, the daily RSI has already slipped beneath its own moving average at 64.92, signaling waning buying momentum even as price action remains technically in bullish territory.
Facing a formidable supply overhang above and downside risks below, buyers are now forced to seek fresh capital inflows rather than relying solely on fleeting daily sentiment. Reported by crypto.news.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
