The Importance of $105K: Insights You Might Overlook

The recent decline in Bitcoin has brought prices down to $111K, as the market remains on shaky ground after experiencing recent peaks.

During this volatility, BTC wallet groups are exhibiting mixed signals, with $105K identified as the strongest level of structural support.

Attention on the $105K Support Zone

BTC’s recent retreat from its all-time high of $124K has highlighted $105K as a potentially critical level in the current correction, based on the latest analysis published by CryptoQuant.

Wallet behavior among various cohorts presents a mixed but significant view of accumulation and distribution trends. The smallest holders (0-0.1 BTC) actively distributed at the peak but swiftly resumed accumulation as prices fell, indicating a reactive rather than proactive market role.

In contrast, wallets with 0.1-1 BTC began accumulating at peak levels and have continued steady purchasing. Meanwhile, 1-10 BTC holders ceased distribution around $107K and have turned to accumulation.

On the flip side, 10-100 BTC wallets transitioned from accumulation at $118K to distribution, reflecting a more cautious approach. The 100-1K BTC segment appears most pivotal, as they show a balance of accumulation and distribution around the $105K level, designating it as a structural support zone. Larger wallets, especially those holding 1K-10K BTC and 10K+ BTC, continue distributing, though the selling pressure has notably slowed as the correction intensified.

Overall, distribution outpaces accumulation, but the intensity of this trend is diminishing. Should Bitcoin revisit the $105K level, CryptoQuant indicated that it will be tested as a potential “last stronghold.” A fall below this could incite heightened fear and spur selling, whereas resilience could indicate a stronger recovery is on the horizon.

While wallet cohorts depict cautious accumulation and distribution trends, the derivatives market has already purged weak participants through a significant long squeeze.

Have Weak Hands Been Flushed?

The drop in Bitcoin has led to millions in long liquidations, erasing late entrants who had leveraged themselves heavily. This incident, known as a long squeeze, occurred as forced sell orders cascaded through the derivatives market, collapsing open interest and dragging Binance’s total net taker volume down to -$1 billion.

Despite the unsettling move impacting market sentiment, it also executed a structural “reset” – overextended positions were eliminated, leverage reduced, and weak hands shaken out. This market cleanup leaves it leaner and less susceptible to further forced selling; however, experts asserted that with open interest reset and speculative excess drained, conditions now reflect a healthier foundation for upward movement.