Bitcoin Caught Between Key Support and Resistance Points—Will the Bulls Prevail?
Reasons to Trust
Adherence to a stringent editorial policy prioritizing accuracy, relevance, and objectivity.
Developed by specialists in the industry and thoroughly vetted.
Commitment to the highest standards in journalism and publication.
Adherence to a stringent editorial policy prioritizing accuracy, relevance, and objectivity.
Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.
Este artículo también está disponible en español.
Current on-chain data indicates that Bitcoin’s spot price is presently situated between two essential zones where numerous investors previously acquired their holdings.
Bitcoin Trading Between Key On-Chain Demand Zones
In a recent update, analyst Ali Martinez discussed the crucial on-chain support and resistance levels for Bitcoin. In the context of on-chain analysis, these levels are determined by the purchase prices of investors.
This stems from the idea that holders tend to react sensitively to movements around their break-even points. An investor’s response to a revisit of their acquisition price varies based on aspects like the direction of the movement and the prevailing market sentiment.
Related Insights
Generally, investors may feel inclined to accumulate more assets upon a revisit of their acquisition price from above (if they were previously in profit). They often believe that this level will become profitable once again.
Conversely, those who are at a loss before the retest might choose to exit, anticipating further declines in the cryptocurrency’s value.
When only a limited number of investors exhibit these buying or selling behaviors, Bitcoin may not show significant price movements. However, if the asset is retesting a narrow range with a substantial number of holders’ break-even points, the situation can be quite different.
Below is the chart shared by the analyst illustrating the current BTC spot price’s surrounding ranges in terms of holder cost basis distribution:
The chart demonstrates that Bitcoin has recently surpassed a significant supply wall during its recovery rally. This cost basis level, located between $93,700 and $96,600, includes the acquisition price from 2.13 million addresses, totaling 1.39 million BTC purchased in this range.
The next challenge for the asset is to breach the $96,900 to $98,700 zone, which holds the cost basis for 750,800 BTC. Given that these investors are underwater, there may be challenges in crossing this threshold.
However, the transition of the more significant $93,700 to $96,600 zone into a supportive status could be a positive indicator. This strong support might provide a cushion for Bitcoin to fall back on following each unsuccessful attempt to break above it.
Related Insights
If this support level fails, the next significant zone doesn’t emerge until around $82,000 to $85,000. The question remains whether demand can sufficiently sustain the recovery of BTC’s price.
BTC Price Status
At present, Bitcoin is hovering around $96,800, reflecting an increase of over 2% over the past week.
Featured image from Dall-E, IntoTheBlock.com, chart from TradingView.com
Post Comment