Cryptocurrency researcher Axel provided insight into why Bitcoin, Ethereum and Solana prices they keep crashing. This comes as BTC continues to experience a supply overhang, which threatens to put more downward pressure on cryptocurrency prices.

Why Bitcoin, Ethereum and Solana prices keep falling

In research reportAxel noted that abnormal currency inflows accompanied BTC’s decline below the $90,000 zone as sellers prepared in advance. The market also remains at risk of further selling pressure as the 1.0 level is reached SOPR for short-term holders currently acts as resistance rather than support. Therefore, there is a possibility of further decline in the prices of Bitcoin, Ethereum and Solana.

Commenting further on the influx of bitcoins into exchanges, Axel noted that between January 20 and 21, almost 17,000 BTC flowed into the exchangescoincided with BTC dropping to just $87,000, while Ethereum and Solana prices also dropped. The crypto researcher explained that these abnormally high values ​​followed a period of mostly negative net flow in the first half of this month.

In the context of the falling price of Bitcoin, Axel said that such a jump is a reflection of supply preparation rather than neutral transfers. In other words, the breakdown below $90,000 appears to be structural rather than emotional. Meanwhile, Bitcoin network flow returned to neutral levels yesterday, but cumulative inflows continue to create a supply overhang that could lead to further declines in Bitcoin, Ethereum and Solana prices.

Axel noted that a signal of improvement would be a renewed decline in net flows in the face of rising prices, which could indicate the overhang is subsiding. However, with short-term holders’ 7-day SMA SOPR below 0.996, the cryptocurrency researcher suggested that BTC faces increased selling pressure in any recovery as these holders look to sell once breakeven is reached. He added that reversal momentum could be confirmed if SOPR breaks above 1.0 from below, with the 7-day SMA holding unity for three to five days to filter out spurious post-sell-off spikes.

Why a break above $100,000 seems unlikely for now

In the latest research reportonline analytics platform Glassnode explained that a Bitcoin rally above $100,000 seems unlikely for now as a supply overhang persists. They noted that excess supply above $98,000 remains the dominant force on the sell side, limiting short- and medium-term recoveries.

Referring to the distribution rate of realized unspent prices, Glassnode noted this BTC’s recent surge partially filled the previous gap between $93,000 and $98,000 resulting from redistribution from the largest buyers to newer market entrants.

However, the unresolved supply overhang issue is expected to likely limit attempts above bondholders’ short-term cost basis of $98,400 and the $100,000 level. It is believed that a significant and sustained acceleration in demand dynamics is required for a immaculate break above $100,000 to occur.

Featured image from iStock, chart from Tradingview.com