TLDR
- Bitcoin has entered a $70K-$80K “air pocket” with less than 2% of supply in this range, likely leading to increased volatility
- BTC price has dropped below $75K twice in the past week after reaching an all-time high of $109K on January 20
- Historically, Bitcoin tends to revisit and consolidate in previously skipped price ranges
- Stablecoin activity has surged with Active Addresses exceeding 300,000 and transaction volume reaching $72 billion
- About 25% of Bitcoin’s supply is currently being held at a loss, primarily by short-term holders
Bitcoin has dipped below $75,000 twice in the past week as it continues its decline from the all-time high of $109,000 reached on January 20, 2025. This price movement has taken Bitcoin into what analysts call an “air pocket” between $70,000 and $80,000, a range characterized by thin liquidity.
According to data from Glassnode, less than 2% of Bitcoin’s total supply exists within this price range. This air pocket formed after Bitcoin soared following Donald Trump’s election victory in November, climbing rapidly from $70,000 to over $100,000 without consolidating at intermediate price levels.
The largest cryptocurrency by market capitalization is now trading around $77,300, showing signs of price instability as it navigates this thin liquidity zone. The lack of price interaction in this range implies low supply, which increases the likelihood of rapid price movements in either direction.
Understanding Bitcoin’s Current Position
One way to visualize this phenomenon is through Bitcoin’s unspent transaction output (UTXO), which represents the amount of Bitcoin received but not yet spent. The UTXO Realized Price Distribution (URPD) shows the prices at which existing Bitcoin UTXOs last moved.
Historical patterns suggest that when Bitcoin rallies without consolidating at key levels, it often returns to retest them later. In order to establish a sustainable price movementâeither higher or lowerâBitcoin will likely need to consolidate within this “air pocket” range.
Currently, around 25% of Bitcoin’s supply is being held at a loss. These holdings are primarily concentrated among short-term investors who purchased Bitcoin within the last 155 days, when prices were higher than current levels.
Stablecoin Activity Points to Market Movement
While Bitcoin experiences volatility, stablecoins have seen a sharp increase in activity. Data from market intelligence platform IntoTheBlock shows that stablecoin Active Addresses have recently crossed above 300,000, with transaction volume reaching $72 billion.
The total value of stablecoins in circulation reached new all-time highs this quarter, with over $220 billion in circulation at the moment. pic.twitter.com/ifRb7qyT4M
— IntoTheBlock (@intotheblock) April 6, 2025
This uptick is most evident in USDT (Tether) and USDC, the two largest stablecoins by market capitalization. The total market cap of stablecoins has also set a new record, indicating fresh capital inflows into these assets.
Stablecoin metrics can provide valuable insights into market sentiment. Investors typically store capital in stablecoins when they want to avoid cryptocurrency volatility, creating a pool of funds that may eventually return to Bitcoin and other cryptocurrencies.
The recent surge in stablecoin activity could be interpreted in two ways. It might represent investors swapping stablecoins to buy the dip in Bitcoin prices. Alternatively, it could indicate traders moving from volatile cryptocurrencies into the relative safety of stablecoins during market uncertainty.
What This Means for Traders
For traders and investors, the current situation presents both risks and opportunities. The low supply concentration between $70,000 and $80,000 suggests that price action in this region could remain volatile due to limited liquidity.
Bitcoin’s price behavior in this air pocket will be closely watched by market participants. If the cryptocurrency can establish support within this range, it may create a foundation for future price appreciation. Conversely, failure to hold these levels could lead to further downside.
The high percentage of supply currently at a loss (25%) indicates many recent buyers are underwater on their investments. This situation could create selling pressure if these holders decide to cut their losses.
At the same time, the increased stablecoin activity suggests that significant capital remains on the sidelines, potentially ready to enter the market if conditions become favorable.
Bitcoin’s price is currently back at $77,300 after retracing some of its latest recovery. Traders are watching key support and resistance levels within the $70,000 to $80,000 range for signs of where the market might head next.
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