Bitcoin (BTC) began November with a period of relative stability, hovering around $110,350 after a 24-hour stretch of minimal price fluctuation. However, although the price chart suggests a potential reversal pattern that typically indicates an impending upward movement, BTC has yet to manage a breakout from its current levels. Recent on-chain data sheds light on the factors stalling this movement and what might eventually trigger a change.
A critical component to understanding Bitcoin’s stagnation is the cost basis distribution heatmap, which illustrates where investors last purchased their coins. This heatmap reveals a significant supply zone between $110,000 and $112,500, where approximately 434,000 BTC were last accumulated. Such dense clusters often serve as resistance points; traders who bought within this range are likely to sell as prices revisit their cost basis, creating selling pressure at these levels.
The supply wall in this range has effectively capped BTC’s attempts to rally for over a week. Coupled with important technical markers that coincide with this price range, the heatmap reinforces the notion that a firm closing above $112,500 is essential for validating the pending reversal pattern. Until such a breakout occurs, Bitcoin remains in a limbo state, awaiting a definitive catalyst.
Interestingly, on-chain analysis suggests that large investors, or whales, might be poised to be that catalyst. Data indicates that wallets containing between 1,000 and 10,000 BTC have resumed accumulation. After a period of dormancy, the 30-day whale address count demonstrated a positive change for the first time since August 31, indicating renewed accumulation activity. Despite a dip to a three-month low on October 27, the number of whale addresses has been climbing, suggesting a revival of confidence among major players in the market.
This increase in whale activity could signal a shift that enables Bitcoin to absorb the existing selling pressure around the $112,500 mark, setting up the conditions for a potential breakout.
From a technical standpoint, Bitcoin continues to exhibit a clear inverse head and shoulders formation. A daily close above $116,400 would confirm this breakout, paving the way for potentially ambitious targets of $122,000, $125,900, and $130,800. Additionally, the Relative Strength Index (RSI), which assesses buying and selling strength, is showing a bullish divergence. Between late October and the end of the month, while Bitcoin’s price recorded lower lows, the RSI registered higher lows—a typical indication of an impending trend reversal and the beginning of upward momentum.
However, it is crucial to monitor the resistance levels closely. The key resistance zone is around $112,590, which aligns with the insights provided by the cost basis heatmap. If Bitcoin should tumble below $106,200, the existing breakout structure might begin to falter, with a drop under $103,500 risking the invalidation of the bullish pattern and signaling that sellers have regained the upper hand.
