According to on-chain data, Bitcoin could find significant support between $66,900 and $68,900, which could help provide a solid base for a fresh rally to higher levels.
Many investors bought Bitcoin between $66,900 and $68,900.
BTC is currently hovering above key demand areas, according to data from market intelligence platform IntoTheBlock. In on-chain analysis, the strength of a support or resistance level is determined by the amount of “demand” that exists at that level.
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The chart below shows various Bitcoin price ranges currently close to spot value and how they compare in terms of the total amount of assets purchased by investors.
Here the size of the dot is related to the total number of tokens last won in that price range. Of these zones, levels between $66,900 and $68,900 appear to be hosting the highest volume of BTC’s cost basis at the moment.
Within this range, over 2 million addresses acquired 1.1 million BTC. Since the BTC spot price is currently above this level, any investor who buys there will make some profit.
Investor cost criteria are important in on-chain analysis because their levels have special psychological significance. A potential retest could upset the holder’s balance of profits and losses.
Therefore, investors may be inclined to take some action when retests like this occur. Holders who incur losses before the retest (i.e. the retest occurs below) may be tempted to sell out of fear that the price will fall in the future.
On the other hand, before the retest, green investors may decide to accumulate more assets because they have reason to believe that prices will rise again.
One of these reactions may occur on a scale relative to the broader market as investors retest the price range. Therefore, the key demand zone below can act as a support point and the demand zone above can act as a resistance block.
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Bitcoin currently has a wide support range between $66,900 and $68,900, which could help cushion the decline if the asset’s price declines.
Looking at the chart, it is also clear that at the same time, the range of Bitcoin holders is thin. This could theoretically provide ideal conditions to rise towards higher levels.
BTC price
Bitcoin surged past the $70,000 level this morning, but the asset has since fallen back to $69,100.
Dall-E, featured image from IntoTheBlock.com, chart from TradingView.com
Source: NewsBTC.com