Bitcoin's Onchain Metrics Indicate Potential Risk Zone Amid Market Volatility
According to Cointelegraph, Bitcoin (BTC) is currently navigating a challenging market environment, with its price fluctuating within a range after testing the demand zone between $112,000 and $113,000. The cryptocurrency is attempting to surpass a descending resistance trendline, which could potentially lead to a rally towards $115,700. However, analysts have identified a hidden risk zone around the $105,000 level, which is becoming increasingly significant based on various onchain metrics.
Crypto analyst CryptoMe highlights that multiple indicators, including the Unspent Transaction Output (UTXO) analysis and realized price models, are converging around the $105,000–$106,000 region. The UTXO Cost Basis Histogram reveals a significant accumulation or realization wall at $105,644, while the realized price for 1–3 month holders and short-term holders aligns closely at $106,000 and $105,350, respectively. Despite these potentially bearish signals in the short term, the analyst maintains a bullish outlook for Bitcoin over the medium and long term. The possibility of a retest around $105,000 could trigger sharp volatility, posing risks to leveraged traders in the derivatives market.
Further data from Glassnode suggests that Bitcoin is in a precarious position below $117,000. The UTXO Realized Price Distribution (URPD) indicates significant resistance at this level, where a large number of BTC UTXOs were created or last moved. Below $117,000, a gap extends down to $108,000, with minimal support at $113,000, suggesting potential for rapid downside movement if Bitcoin loses its current price level. This reinforces the possibility of a decline towards $105,000.
Trading platform Hyblock Capital notes that Bitcoin's open interest (OI) remains elevated at $79 billion, indicating that speculation in the futures market has not fully reset. This keeps the market fragile, especially as Bitcoin undergoes a correction from its $123,000 all-time high. Historically, high OI levels combined with the Fear & Greed Index entering "Extreme Greed" territory have preceded local tops and corrections. This pattern was observed on July 16, leading to Bitcoin's drop to $112,000 from $120,000. Although the Fear & Greed Index has now reset to Neutral, high open interest continues to outline price uncertainty.
Bitcoin researcher Axel Adler Jr. adds that futures market bearishness peaked at –7.5% on July 29, shortly after Bitcoin reached a new all-time high. While this pressure has eased slightly to –5.2%, structural risks remain. Adler warns that any sudden negative catalyst could trigger a cascade of long liquidations, amplifying downside momentum. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
