An analyst has revealed the Bitcoin price zones that could act as major support and resistance centers for the cryptocurrency.
A Large Number Of Investors Bought Bitcoin Inside These Zones
In a new post on X, CryptoQuant author IT Tech has discussed the Bitcoin price levels that could act as support and resistance for BTC. In on-chain analysis, the potential for any price level to behave in this manner lies in the amount of tokens purchased.
Below is the chart from the market intelligence platform IntoTheBlock shared by the analyst, which shows how the price ranges near the current one look in terms of the number of coins that share their cost basis.
In the graph, the size of the dot corresponds to the number of coins purchased at the price range. The dots of two ranges stand out: $59,160 to $60,973 and $64,670 to $66,483.
Bitcoin had been just above the first of these ranges when the analyst made the post, but now the coin has dipped into it, meaning it’s retesting the zone.
To any investor, their cost basis is naturally an important level, so they may be more likely to make some move when the cryptocurrency’s price retests it. When many holders share their cost basis inside the same narrow range, this reaction can emerge on a scale that can affect the market.
Almost 1.7 million addresses purchased 965,239 BTC inside the $59,160 to $60,973 range, and after the pullback in the price, these holders would be sitting at their break-even.
Generally, when the asset retests an investor’s cost basis from above, they are probably to react by buying more, as they could believe the asset would go up again to put them in profits. The coin can naturally feel support when this reaction is produced on an appreciable scale.
As the range at hand is quite large, the analyst has called it the biggest support zone for Bitcoin. Since BTC is retesting it now, it remains to be seen whether investors would truly step in and buy the “dip.”
If BTC feels support and finds a rebound, it will have to retest the resistance levels ahead. As mentioned before, the $64,670 to $66,483 range is host to the acquisition level of many coins.
Holders at a loss may look forward to a retest of their cost basis to exit at their break-even and regain the entirety of their capital. So, large demand zones can provide resistance when Bitcoin retests them from below.
The $64,670 to $66,483 range could prove a significant challenge for the cryptocurrency because of this.
BTC Price
At the time of writing, Bitcoin is trading at around $60,200, up 1% over the past week.
Featured image from Dall-E, IntoTheBlock.com, chart from TradingView.com