Bitcoin Crashes: Here’s Where The Nearest On-Chain Support Is

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As a seasoned analyst with years of experience in the volatile world of cryptocurrencies, I find myself constantly scrutinizing charts and indicators to discern market trends and patterns. The current plunge in Bitcoin has piqued my interest, and upon closer examination, I’ve found an intriguing on-chain level that could potentially act as a support for the asset.

Over the past 24 hours, I’ve noticed a significant dip in the value of my Bitcoin investment. If this downtrend persists, here’s a likely on-chain level where the asset might retest for support.

1 Week To 1 Month Bitcoin Holders Have Their Realized Price At $97,900

According to a recent post by Axel Adler Jr on X, the current support for Bitcoin is provided by the Realized Price of investors who have owned it for between one week and one month.

In simpler terms, “Realized Price” is a term for an on-chain indicator that essentially records the average purchase price of Bitcoin holders within the Bitcoin network.

If the metric’s value falls below the current market price of the cryptocurrency, that generally indicates that investors as a whole are in a position where they collectively hold more profit than loss. Conversely, when this value is less than the Bitcoin value, it typically implies that losses are prevailing over profits in the market.

In the given subject, we’re focusing on the Realized Price specifically for a particular age group within the sector: those who have held their assets for between one week and one month. This group consists of the wallets that have been storing their holdings for a minimum of seven days and a maximum of four weeks.

Here’s a chart provided by our analyst, illustrating the fluctuations in the average price paid for Bitcoins within this group over the last twelve months.

According to the graph, the value of Bitcoin held by 1-week to 1-month old investors has been increasing in tandem with the market surge. This rise can be attributed to the fact that the initial cost of this group’s investment is being reevaluated at higher prices as new buyers have been purchasing at the peak prices during the rally.

As a crypto investor, I’m currently sitting on a profit with the indicator value at approximately $97,900, but earlier today, the asset dipped briefly below my investment price of $99,000, giving me a momentary cause for concern as it neared a potential retest of that level.

1-week to 1-month-old investors fall under a larger group called short-term holders (STHs), which refers to individuals who have recently purchased their coins over the last 155 days.

From a statistical perspective, as an investor keeps their assets longer, they’re generally less inclined to sell them. This implies that the group who have held onto their coins for only one week up to one month are likely the investors with the least commitment in this sector, given their shorter holding period.

Due to their unpredictable nature, STHs (Strong Hodlers) typically respond whenever the average cost at which they bought Bitcoin is matched by its price. This response might manifest as buying when the retest happens from above, as these investors may view the decrease as merely a temporary ‘dip.’

In simpler terms, the current price of 1-week to 1-month-old STHs being lower than the present price could serve as a potential support level for the cryptocurrency. This level has already provided assistance to the asset during this month.

Thus far, Bitcoin appears to be bouncing back from its dip, however if negative trends resume, it might be wise to keep an eye on a potential revisit of a significant trendline, given its historical pattern.

BTC Price

At the time of writing, Bitcoin is trading at around $102,200, down almost 3% in the last 24 hours.

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2024-12-20 02:47