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 looks like for BTC.
Bitcoin Has Strong On-Chain Support Between $61,900 & $63,800
According to data from the market intelligence platform , BTC is floating just above a critical on-chain demand zone. Demand zones refer to price ranges where many investors last bought their coins.
These ranges can be determined through on-chain analysis, as the average cost basis of each address on the network can be readily calculated through its transaction history.
Below is the chart shared by the analytics firm that shows the various price ranges near the current asset price in terms of the present demand.
In the graph, the size of the dot corresponds to the number of addresses bought inside the respective range. It appears that Bitcoin currently has large demand zones both just above and below itself.
According to IntoTheBlock data, the lower range currently holds the cost basis of around 1.23 million addresses for investors who bought 319,700 BTC. Now, what’s the relevance of a demand zone like this?
To any investor, their cost basis is important, so when the price tests it, they may become more prone to making some move. Naturally, if many holders share their break-even level inside a narrow range, the reaction resulting from a retest would also be large.
Because of this reason, zones of major demand are considered to be important support or resistance levels for Bitcoin. Cost basis centers above the price can act as resistance walls, while those below can provide support cushions.
Since BTC is hovering just above a major demand zone between $61,900 and $63,800 after its latest decline, it’s possible that the range could help the asset reach a bottom.
As for the source of the support or resistance effect provided by these demand zones, the answer lies in investor psychology. The holders currently in loss may be looking forward to the price hitting their cost basis to exit with their initial investment.
This selling that may appear upon a retest of many investors’ shared break-even level can pose resistance to BTC. Similarly, the investors below can react to a retest by buying more, as they could look at the drop as a dip opportunity, thus supporting the asset.
Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.
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Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.
In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.
Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.
Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..
Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.
Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.
As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.
Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.
Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.
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