Lower exchange deposits ease downward pressure on prices in the short term, according to the analytics firm.
Bitcoin News
Bitcoin's recent rally could extend toward $112,000 in the near term if the Federal Reserve adopts a more dovish stance and Bitcoin breaks key resistance levels at $99,000 and $102,000, according to on-chain analytics firm CryptoQuant. The firm outlined a potential path for continued upward momentum contingent on multiple factors aligning.
Julio Moreno, CryptoQuant's head of research, stated that Bitcoin's upward trajectory hinges not only on rate cuts but also on how quickly the Fed signals it will cut next year and what it projects for inflation. The firm called the $99,000 and $102,000 levels critical price resistances that must be cleared first.
Bitcoin has recovered from around $80,000 on Nov. 21 to approximately $90,500 today, primarily because selling pressure has eased. CryptoQuant pointed to declining Bitcoin deposits into exchanges as evidence that sell-side activity has slowed, dropping to 21,000 Bitcoin today from 88,000 Bitcoin on Nov. 21.
Exchange deposits started to increase after Bitcoin's previous all-time high of $126,000 and peaked before it fell as low as $80,000. Lower exchange deposits ease downward pressure on prices in the short term, according to the analytics firm.
The $99,000 level represents the lower band of the Trader On-chain Realized Price bands, which serves as a price resistance during bear markets, CryptoQuant wrote in a Wednesday report. After this level, the key price resistances are $102,000, representing the one-year moving average, and $112,000, which marks the Trader On-Chain Realized price.
The firm highlighted reduced activity from large holders, who were heavy contributors to exchange inflows during the downturn. The share of total deposits from large players has declined from a 24-hour average high of 47% in mid-November to 21% as of today. The average deposit has shrunk 36% from 1.1 Bitcoin on Nov. 22 to 0.7 Bitcoin currently.
Downward pressure also eased as large investors and short-term holders realized significant losses. On Nov. 13, new and old whales realized $646 million in losses, the largest since July, as prices first crossed below $100,000. Since then, these investors have realized a cumulative net loss of $3.2 billion, the firm added.
CryptoQuant noted that, historically, selling pressure eases when market participants realize they have incurred heavy losses. Wall Street largely expects the Fed to cut rates by a quarter point, but uncertainty remains around how quickly rates might fall in 2026.
If the Fed's signals prove supportive, Moreno expects Bitcoin to first test $99,000, after which it will depend on whether traders take profits or if selling pressure remains low for a potential relief rally toward higher resistance levels.
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