Bitcoin [BTC] has caught the market’s attention with a significant on-chain move: a whale transferred 1,220 BTC, worth over $94.5 million, from the Kraken exchange to an unknown wallet. Whale transactions like this often precede volatility, leading to speculation about potential shifts in market sentiment. While this transaction has raised eyebrows, Bitcoin’s price continues to face challenges, particularly with the critical $80,000 resistance level looming large.

At the time of writing, Bitcoin is trading at $77,175, reflecting a 2.33% decline in the past 24 hours. Despite some positive signs, such as a majority of holders being in profit, the market remains cautious due to the resistance and technical structure in place. The $80,000 level remains a crucial psychological barrier that Bitcoin must overcome to fuel the next rally.

On-Chain Data Suggests Optimism

Recent on-chain data offers a more optimistic outlook for Bitcoin. According to the “In/Out of the Money” chart, 73.53% of Bitcoin addresses are currently in profit, while only 24.56% are underwater. This indicates that most Bitcoin holders bought at lower prices, giving the market a psychological cushion. As a result, there is less selling pressure compared to previous bearish periods.

Despite this, the market remains cautious, as the potential for a price rejection at the $80,000 mark could unsettle investors holding smaller unrealized profits. A rejection could lead to selling, causing the price to dip further.

Bitcoin’s Key Support Levels and Resistance

Bitcoin’s price action remains constrained under a descending trendline, struggling to break through resistance at $80,000. The next significant support zone lies between $72,000 and $75,000, which has consistently absorbed selling pressure in recent weeks.

If Bitcoin can hold above this support and reclaim the $80,000 level with strong momentum, it could signal a bullish reversal, opening the door to higher price levels. A confirmed break above $83,878 would likely invalidate the current downtrend and set Bitcoin on a path toward $96,000. However, any failure to maintain the $77,000–$75,000 support could accelerate selling pressure, bringing the price closer to lower levels.

Market Sentiment and Network Fundamentals

Bitcoin’s network fundamentals present a mixed picture. Active addresses have dropped by 8.78%, and zero-balance addresses have declined by 14.16%. This indicates a reduction in overall participation. However, new address growth has risen by 1.22%, suggesting that fresh interest is gradually returning to the market. Historically, an increase in new addresses has preceded significant bullish trends, hinting that a foundation is forming beneath the surface.

Despite some declines in network activity, the net unrealized profit/loss (NUPL) remains positive at 0.43, indicating that investors are still holding moderate unrealized profits. While this suggests that panic is not widespread, the market remains fragile, and a failure to break past resistance could lead to a shift in sentiment.

Will Bitcoin Bounce?

Considering the current on-chain activity, Bitcoin is positioned for a potential relief rally. With over 70% of holders in profit, the price is holding steady above key support levels, and new users are gradually entering the market. However, the $80,000 resistance continues to be a significant hurdle. If Bitcoin fails to break through this level with conviction, there is a risk of a local rejection, which could push the price lower.

In conclusion, while the conditions for a Bitcoin rebound are beginning to align, caution is still required. Investors and traders should remain alert to any price movements around the $80,000 mark, as this will likely dictate the direction of Bitcoin in the coming days.