As a seasoned analyst with years of experience in the cryptocurrency market, I have witnessed the ebb and flow of Bitcoin prices like the tides of the ocean. The support and resistance zones revealed by CryptoQuant author IT Tech are not just lines on a chart, but potential battlegrounds where the collective actions of investors can shape the market’s direction.
A researcher has disclosed potential price levels in Bitcoin that might function as crucial points of support and resistance, influencing its future movement.
A Large Number Of Investors Bought Bitcoin Inside These Zones
In a new post on X, CryptoQuant author IT Tech has discussed the Bitcoin price levels that could act as support and resistance for BTC. In on-chain analysis, the potential for any price level to behave in this manner lies in the amount of tokens purchased.
Drawing upon my years of experience in analyzing market trends, I find the chart shared by the analyst from IntoTheBlock particularly insightful. It provides a unique perspective on the distribution of prices near our current range, based on the number of coins that share their cost basis. As someone who has closely monitored various markets and their fluctuations, this visual representation offers a valuable tool for understanding potential price movements and investor sentiment. It’s always fascinating to observe patterns in data and use them to make informed decisions, and this chart certainly falls into that category.
On this graph, the dot’s size signifies the quantity of coins bought within each price bracket. Two sets of dots are noticeably larger: those falling between approximately $59,160 and $60,973, as well as those in the range from around $64,670 to $66,483.
At the time the analyst posted, Bitcoin was slightly above the specified range; however, its value has since dropped, causing it to test or probe the indicated zone again.
For any investor, their ‘cost basis’ plays a crucial role in their decision-making process. Therefore, they might take some action when the cryptocurrency’s price touches this level again. When multiple investors have similar cost bases within a narrow range, this collective response could potentially impact the overall market significantly.
Approximately 1.7 million Bitcoin addresses bought around 965,239 Bitcoins within the price range of $59,160 to $60,973. Following the drop in the coin’s value, these investors would now have recovered their initial investment (break-even point).
Typically, if an asset approaches a price level that exceeds an investor’s initial purchase price (cost basis), their likely response might be to buy more, as they anticipate the asset will rise further, thereby pushing them into profit. When this reaction occurs significantly, it can provide support for the coin.
Given the extensive span of the current range, this significant support area for Bitcoin has been labeled as the largest by the analyst. As Bitcoin is currently testing this level, it will soon become clear if investors are indeed willing to capitalize on any potential price drop by purchasing at this point.
Should Bitcoin (BTC) encounter support and bounce back, it may need to challenge the resistance levels that lie ahead. Previously, I stated that the price range between $64,670 and $66,483 serves as a significant buying point for various cryptocurrencies.
As an analyst, I find myself anticipating potential opportunities for holders who are currently in the red. Should Bitcoin revisit significant demand zones it has previously encountered from a lower position, these areas might serve as a barrier to further price decrease, acting as resistance levels. This could present a chance for those at a loss to retest their entry point (cost basis) and potentially exit the market without any additional losses, thus regaining their initial investment.
The cryptocurrency might find it quite difficult within the $64,670 to $66,483 price range due to these factors.
BTC Price
At the time of writing, Bitcoin is trading at around $60,200, up 1% over the past week.
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2024-08-23 13:16