Top-Heavy Market Structure

Definition ∞ A top-heavy market structure describes a condition where a significant portion of a digital asset’s supply was acquired at price levels substantially higher than the current market price. This creates a large overhang of potential selling pressure from holders who are currently at a loss. As the price attempts to ascend, these holders may sell to recoup their initial investment. It represents a formidable barrier to upward price movement.
Context ∞ Crypto news frequently references a top-heavy market structure when analyzing potential resistance levels for Bitcoin or other digital assets. This on-chain phenomenon suggests that any price recovery might be met with strong selling as distressed holders seek to exit. Understanding this structure helps analysts identify areas where price rallies could face significant headwinds.