Recent on-chain data points to a formidable Bitcoin supply wall hovering around the $97,200 mark, a possible roadblock in BTC’s path to rising any further.
Bitcoin Faces Key Resistance Levels Ahead
IntoTheBlock, a market intelligence platform, recently shared insights into Bitcoin’s current support and resistance levels, analyzed from an on-chain perspective. In essence, the ability of any price level to act as either support or resistance depends on the volume of Bitcoin supply last transacted or acquired at that level. The analytics firm provided a chart illustrating the distribution of Bitcoin supply near its current price.
In the chart, you’ll notice that the significance of each dot corresponds to the volume of Bitcoin that investors secured within that specific price range. Particularly, the $96,400 to $98,400 range stands out, bearing a notably large dot, indicating that many holders are tied to this cost basis.
To delve deeper, roughly 1.6 million addresses last purchased a total of 1.57 million BTC in this bracket. With Bitcoin currently trading below these levels, these investors find themselves in a losing position.
When investors face losses, there’s often a rush to recover their investments, leading to potential sell-offs as soon as the price rebounds to their buying point. If these sales are minor, they might not impact the asset too much. However, if a substantial number of investors are involved, it could trigger a price movement.
Given the expansive nature of the $96,400 to $98,400 range, it may be a reason Bitcoin hasn’t experienced significant upward movement recently. Just as supply overhead can create resistance, supply below can serve as support. Investors who were previously profitable might view a price dip as a chance to invest more, anticipating a future price rise.
Currently, Bitcoin’s most substantial support wall lies between $93,400 and $96,200, although it holds less supply than the resistance ahead, suggesting its influence might be weaker.
If this support range falters, Bitcoin faces scanty support levels until around $81,800. It remains to be seen whether Bitcoin can breakthrough this resistance or if it will test these weaker supports.
BTC Price Update
As it stands, Bitcoin is trading near $96,000, experiencing a 2% drop over the last 24 hours.
