Bitcoin Plunges Under $63,000, Here’s Where Next On-Chain Support Is
19 Mars 2024 - 5:00PM
NEWSBTC
Bitcoin has deepened its decline in the past day with its price now
slipping below $63,000. Here’s where the next potential support is,
according to on-chain data. Bitcoin Could Find Support At These
Price Levels In a new post on X, analyst Ali has discussed how the
Bitcoin support and resistance levels are looking like right now
based on on-chain data from Glassnode. The indicator of relevance
here is the “UTXO Realized Price Distribution” (URPD), which, in
short, tells us about the amount of coins (or more precisely,
UTXOs) that were last purchased at any given price level that the
asset has visited in its history so far. Related Reading: Bitcoin
Has Undergone This Bearish Structure Change, Analyst Explains Below
is the chart shared by the analyst that shows the data for this
distribution for the price levels around the recent spot value of
the cryptocurrency: Looks like the $72,880 mark is the level with
the richest amount of coins at the moment | Source: @ali_charts on
X From the graph, it’s visible that there are a few price levels
not far from the current one that particularly stands out in terms
of the amount of buying that took place at them. In on-chain
analysis, the potential for any level to act as support or
resistance is based on the total number of coins that have their
cost basis at the level in question. Levels thick with coins that
are situated under the current price would be probable to act as
points of support, while those above the spot value could prove to
be resistance walls. As is apparent from the graph, the $61,100,
$56,685, and $51,530 levels are the ones below the current price
that hold the cost basis of a notable amount of the supply right
now. Naturally, this means that should the decline continue
further, these would be the levels to watch for a possible rebound.
Two levels above, however, are even larger than all three of these
support levels: the cost basis centers around $66,990 and $72,880.
Interestingly, the latter of these is the single largest
acquisition level out of all the price levels listed in the chart,
implying that a large amount of FOMO buying has occurred at the
asset’s all-time high levels. In the scenario that Bitcoin regains
its upward momentum, these levels of high cost basis population
would be where the asset could be most probable to find some
trouble. Now, as for why acquisition centers are considered
relevant for support and resistance in on-chain analysis is the
fact that investors are likely to show some kind of reaction when a
retest of their cost basis takes place. Related Reading: Bitcoin
Sentiment Cools Off, Price Rebound Soon? When such a retest is from
above, the holders may decide to accumulate more, believing that
the price will go up again in the future. On the other hand, they
may sell instead if the retest is from below, as they may think
exiting at break-even is better than risking another drop. A large
number of coins having their cost basis at the same level means a
potentially large degree of one of these reactions happening and,
hence, a strong support or resistance effect on the price. BTC
Price Bitcoin is inching closer to the first major on-chain support
level as it has now dropped to $62,700. The price of the asset
appears to have plummeted over the last few days | Source: BTCUSD
on TradingView Featured image from Shutterstock.com, Glassnode.com,
chart from TradingView.com
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