After surging last week, Bitcoin saw fairly stable price action throughout the weekend. Given the rising tensions in the Middle East, determining the future trajectory of the cryptocurrency market has been somewhat of a challenge.

Nevertheless, the technical and blockchain structure of the leading cryptocurrency suggests that the bear market continues. In fact, the latest on-chain assessment suggests that Bitcoin’s price is still susceptible to downside volatility.

BTC price preparing for another round of bearish momentum?

In a novel post on the X platform, on-chain analyst Boris he argued that Bitcoin’s price remains in market structures that ultimately lead to downward movements. This observation is based on the rising long-term holder (LTH) vigorous supply indicator, indicating an increasing level of activity within the LTH supply.

According to Boris, volatility tends to emerge within the supply of long-term bondholders ahead of larger upward price moves. This phase is characterized by the strategic distribution of Bitcoin to appropriate locations in preparation for market activity.

Boris said:

As the market grows, these coins are gradually distributed to meet demand. When demand begins to wane, the market typically transitions into a lateral structure, allowing the distribution process to continue.

Currently, the Bitcoin market tends to enter a downtrend after the distribution phase ends and novel positions are created. For example, since the start of the surge in LTH activity, the price of BTC has dropped from around $95,000 to almost $60,000.

Interestingly, the decline in Bitcoin’s price did not reverse the upward trend in the long-term supply of cryptocurrency holders, suggesting that a downward move is still very likely. “Even if we see upward movements in the coming weeks, they will likely represent an illusion of liquidity occurring in the broader distribution phase,” Boris said.

The analyst noted that while the $60,000-$62,000 range appears to be a support zone, the current market structure suggests that this region may simply act as a liquidity generation zone during the redistribution phase. A liquidity generation zone (or liquidity zone) typically refers to a key technical area with a concentration of trading orders, typically stop loss and limit orders.

Boris concluded that based on current data, price declines at the end of the year seem to be a more likely scenario for Bitcoin.

Bitcoin price at a glance

At the time of writing, BTC is trading at around $67,628, reflecting a 1% decline over the last 24 hours.

Featured image from iStock, chart from TradingView