Bitcoin Will Be Set For New ATHs If It Breaks This Resistance: Analyst
May 14 2024 - 12:00AM
NEWSBTC
An analyst has explained how Bitcoin could be positioned for new
all-time highs (ATHs) if it can break through this on-chain
resistance level. Bitcoin On-Chain Data Could Suggest This Level
Holds Major Resistance In a new post on X, analyst Ali discussed
Bitcoin’s current on-chain resistance. In on-chain analysis, the
strength of support and resistance levels is based on the total
amount of cryptocurrency last acquired at each level. Below is a
chart for Glassnode’s UTXO Realized Price Distribution (URPD)
metric, which shows the supply distribution across the various
price levels based on where the investors bought their coins. From
the graph, it’s visible that in terms of the levels currently ahead
of the spot price, the $66,250 mark stands out as it hosts the cost
basis of over 2% of all Bitcoin UTXOs. Generally, the cost basis is
a special level for any investor, and they are naturally more
likely to react when it is retested, as it can lead to a flip in
their profit-loss situation. The spot price retesting a level won’t
produce much reaction if only a few investors share their cost
basis around the level. Still, if many holders bought there, the
cryptocurrency could see visible effects upon a retest. Investors
who are losing money may look forward to such a retest to exit out
at their break-even point, as they may fear that the asset will
fall back down again in the future, so getting away with their
initial capital would seem like the ideal decision. As such, a
retest of a level dense with UTXOs from below can lead to a selling
reaction in the market, making these levels points of strong
resistance for Bitcoin. Since the $66,250 level appears to be where
the most coins were purchased out of the levels ahead, this level
could be the toughest one to break for the cryptocurrency. On the
brighter side, though, the levels after this point are relatively
thin. “Once BTC breaks past this level, it will be positioned for
new all-time highs!” explains the analyst. The market intelligence
platform IntoTheBlock has also discussed about on-chain cost basis
distribution in an X post today. As revealed by the firm, around
10% of all addresses acquired their coins between the current spot
price and the all-time high the asset set back in March. This would
naturally mean that 10% of the total addresses, equivalent to 5.16
million, are in the red on the Bitcoin network. BTC Price Bitcoin
has continued to move in its recent range, with its price currently
trading around the $62,800 level. Featured image from Erling Løken
Andersen on Unsplash.com, Glassnode.com, IntoTheBlock.com, chart
from TradingView.com
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