Bitcoin has been trading within two significant on-chain demand zones, according to on-chain data analysis. These zones represent where a large number of investors last purchased their Bitcoin, providing insight into potential support and resistance levels.
In a recent post on X, analyst Ali Martinez discussed the key Bitcoin on-chain support and resistance levels based on investor cost basis. This approach considers the sensitivity of holders to retests of their break-even mark, which can influence their trading decisions based on market sentiment and price direction.
When Bitcoin retests a range where a significant number of investors acquired their coins, it can lead to visible fluctuations in the market. Holders who were in profit prior to the retest may accumulate more, expecting the price to rise again. Conversely, investors who were at a loss may choose to sell, fearing further declines.
The current chart shared by the analyst shows Bitcoin trading between two major cost basis centers. The first range, $93,700 to $96,600, contains the acquisition mark of 2.13 million addresses who purchased 1.39 million BTC. The second range, $96,900 to $98,700, holds the cost basis of 750,800 BTC, with investors currently at a loss.
Despite the potential resistance in the $96,900 to $98,700 range, the strong support in the $93,700 to $96,600 range could provide a cushion for Bitcoin’s price. However, if this support fails, the next major zone is between $82,000 to $85,000, where demand will be tested to sustain the price recovery.
As of now, Bitcoin is trading around $96,800, showing a 2% increase over the past week. The price surge in the last couple of days indicates a positive momentum, with potential challenges ahead in breaking through the resistance levels.
Overall, on-chain analysis provides valuable insights into market dynamics and investor behavior, helping traders make informed decisions based on key support and resistance levels. Bitcoin’s current position between two major cost basis centers highlights the importance of monitoring on-chain data for a deeper understanding of price movements.
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