As a seasoned crypto investor with years of experience in the market, I’ve learned to pay close attention to on-chain data when analyzing Bitcoin’s price movements. The recent bearish trend we’ve seen over the past day, with BTC slipping under $64,000, has me keeping a close eye on the next support level.
Over the past 24 hours, Bitcoin has followed a downtrend and its value has fallen below the $64,000 mark. Let’s examine where the potential support lies for Bitcoin moving forward.
Bitcoin Has Strong On-Chain Support Between $61,900 & $63,800
Based on information from market intelligence platform IntoTheBlock, Bitcoin currently hovers above an essential demand area based on historical buying patterns of investors. Demand areas represent price levels at which numerous investors previously transacted their purchases.
Through examining the transaction history of addresses on the blockchain, it is possible to ascertain the average cost basis for each account. Consequently, by analyzing these figures, we can establish the price ranges that have been in effect during specific periods.
Here is a chart from the analytics firm displaying the different price levels close to the current asset price, indicative of the existing market demand.
In the given graph, the size of each dot signifies the quantity of Bitcoin addresses that have transacted within the specific price range. Notably, there exist substantial buying interests for Bitcoin around two distinct price levels, one slightly above and another below its current position.
As an analyst, I’d explain that based on IntoTheBlock data, approximately 1.23 million Bitcoin addresses have a cost basis around $31,970 for the BTC they hold. This is significant because it represents a substantial demand zone – a large number of investors who bought in at this price level may choose to sell their coins only if they see a sizable profit. Consequently, this zone could potentially act as a support level during market downturns.
As a crypto investor, I can’t stress enough the significance of determining one’s cost basis. When the market price approaches this figure, my emotions might come into play, potentially leading me to take some action. Furthermore, if multiple investors find themselves in a similar situation with relatively close break-even points, the collective response could be quite substantial upon retesting that price level.
As a crypto investor, I’ve learned that significant demand areas play crucial roles in determining Bitcoin’s support and resistance levels. Prices that have been strongly demanded in the past may serve as barriers for further upward movement (resistance), while areas where the price has historically found a strong bid can act as supportive pillars (support). Essentially, my cost basis, or the price I originally paid for my Bitcoin, can function as either resistance walls when my investment is above the current market price, or supportive cushions when it’s below.
With Bitcoin currently sitting just above significant support levels at roughly $62,000 to $64,000 following its recent drop, there’s a good chance these price ranges could mark the end of the downtrend and facilitate a recovery for the asset.
Regarding the cause behind the price fluctuations at these demand areas, it can be attributed to investor behavior. Currently, investors who are experiencing losses might be anticipating the price reaching their purchase price to sell off their initial investments.
When many investors reach their breakeven point during a Bitcoin resale, this price level may act as a barrier to further sales. Meanwhile, some investors might take advantage of the price decrease and buy more Bitcoin, viewing it as a buying opportunity, thereby strengthening the asset’s support.
It’s yet to be determined if the support range of $61,900 to $63,800 will halt Bitcoin’s recent downward trend.
BTC Price
As a researcher studying the Bitcoin market, I’ve noticed that following the recent price decrease, Bitcoin has found itself in an on-chain demand area. Specifically, its current trading price hovers around $63,600.
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2024-06-22 02:10