Bitcoin (BTC) is down 1.65% over the last week, trading at around $96,796. Despite its recent upward momentum, the asset has faced significant resistance, preventing it from breaking through the psychologically critical $100,000 price level.

Sell Walls Pose a Major Challenge

Cryptocurrency asset data provider Coinglass highlighted a significant sell wall near the $100,000 mark, describing it as a “large concentration of sell orders at a specific price level.” Sell walls create both psychological and technical barriers, making it difficult for an asset’s price to move higher.

Coinglass noted on social media platform X, “We may not reach 100k in the short term” due to this resistance. Similarly, @MI_Algos, a trading signal account on X, suggested that “whales” (large-scale BTC holders) might need to offload liquidity at these levels to create a more accessible path through the resistance.

Bitcoin (BTC) is down 1.65% in the last seven days after falling short of the psychologically important 100K barrier. Source: Brave New Coin Bitcoin Liquid Index

How Sell Walls and Support Levels Impact BTC’s Trajectory

A sell wall like the one at $100,000 restricts upward price momentum but also sets the stage for future tests of this resistance level. In contrast, support levels—where demand for BTC tends to prevent further price declines—play a critical role in shaping market sentiment.

This week, Bitcoin briefly dipped below $91,000 before bouncing back, showing strong demand at lower levels. A successful test of support often attracts buyers who perceive the asset as undervalued, reducing sell pressure and making future resistance tests more likely to succeed.

US Macroeconomic Data and Bitcoin’s Market Dynamics

Bitcoin’s price movements are closely tied to macroeconomic trends. Last week, the release of key US economic indicators aligned with market expectations, providing a stable backdrop for Bitcoin’s performance:

Initial jobless claims and the Personal Consumption Expenditures (PCE) index were consistent with forecasts. The PCE—a preferred inflation measure for the US Federal Reserve—showed a 2.3% year-on-year increase in October 2024, up from 2.1% in September. Federal Reserve Policy: A Boon for Bitcoin?

The Federal Reserve’s monetary policy has a significant influence on Bitcoin’s price. On September 18th, the Fed announced its first interest rate cut in four years, signaling a shift toward a more expansionary stance. After a 50-basis point cut in September, the Fed followed up with a 25-basis point reduction in early November.

According to the FedWatch tool, there’s a 64.7% probability of another 25-basis point cut at the next Federal Open Market Committee (FOMC) meeting which is scheduled for December 17-18. Lower interest rates tend to encourage investment by reducing the cost of capital and making savings less appealing—conditions under which Bitcoin has historically thrived.

Bitcoin has often performed better in environments with lower interest rates. These conditions drive liquidity into riskier assets like cryptocurrencies, as traditional savings mechanisms offer diminished returns. With the Fed expected to maintain its expansionary policy, Bitcoin could see further price gains in the coming months, provided it can overcome the immediate hurdle of the $100,000 resistance level.

Conclusion: A Path Forward for Bitcoin

Bitcoin’s struggle to break through $100,000 underscores the complex interplay of market forces, including sell walls and macroeconomic conditions. While resistance at this level remains formidable, a combination of supportive economic trends and lower interest rates could pave the way for a breakthrough in the near future. For now, the focus remains on testing support levels and reducing sell pressure to clear the path for the next leg upward.