Bitcoin has continued its recent bearish trajectory during the past day as the asset’s price has now slipped under $64,000. Here’s what the next Support for BTC looks similar.
Bitcoin Has Strong On-Chain Support Between $61,900 & $63,800
Data from market intelligence platform IntoTheBlockBTC is hovering just over a key on-chain zone of demand. Demand zones are price bands where investors have bought coins in the past.
On-chain analysis can determine the range by calculating average cost basis The transaction history of each network address can easily be calculated.
The chart below, shared by an analytics company, shows various prices near the asset’s current price, in relation to the demand.
On the graph, you can see that the dots correspond to the total number of transactions within a certain range. Bitcoin has a large area of demand just above it and also below.
According to IntoTheBlock, investors bought 319.700 BTC and the lower range holds their cost base. Now, what’s the relevance of a demand zone like this?
Investors may be more likely to act if the price reaches their cost base. It is only natural that if many people share their breakeven levels within a limited range, the reaction from a new test will be very large.
Bitcoin’s support and resistance levels are therefore based on zones of high demand. The price basis centres above can act as a resistance wall, whereas those below can serve as support cushions.
BTC hovers just below a demand zone of $61,900 to $63,800. latest decline, it’s possible that the range could help the asset reach a bottom.
Then, there’s the source Investor psychology can explain the strength or weakness of demand zones. The investors who have lost money now may look forward to their investment reaching their cost base to get out.
This selling that may appear upon a retest of many investors’ shared break-even level can pose resistance to BTC. Investors below could also react by purchasing more in response to the retest, as they may see the dip as an opportunity and support the asset.
It now remains to be seen if the support zone between $61,900 and $63,800 would put an end to Bitcoin’s recent bearish momentum or not.
BTC price
Bitcoin’s price has now reached $63,600, after the recent drawdown.
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Source: www.newsbtc.com