Bitcoin Struggles to Break $28,000 Level: On-Chain Analysis
According to on-chain analytics firm Santiment, Bitcoin is currently facing some challenges in its attempt to surpass the $28,000 level. On-chain indicators provide insights into whether BTC can sustain its bullish momentum.
Supply on Exchanges
One important metric is the “supply on exchanges,” which measures the percentage of Bitcoin supply held in centralized exchange wallets. A decrease in this metric indicates withdrawals from exchanges, which is typically a bullish sign as investors move their coins to self-custodial wallets for long-term holding. Conversely, an increase suggests selling pressure as holders deposit their cryptocurrency to exchanges.
A chart showing the trend in Bitcoin supply on exchanges over recent months reveals fluctuations in investor behavior.
Daily Active Addresses
The second metric, “daily active addresses,” tracks the number of unique addresses participating in transaction activity on the blockchain. Currently, this indicator has reached its lowest levels since late August, indicating low user interest in Bitcoin.
Historical data shows that sustainable rallies require a significant amount of trader attention. The current recovery lacks such investor activity.
Resistance at $27,900
CryptoQuant analyst Maartunn highlights that the $27,900 level poses a major resistance point. Short-term holders have an average cost basis at this level.
In conclusion, breaking above the $28,000 level may prove challenging for Bitcoin unless there is a significant turnaround in user interest.
Bitcoin Price Update
Bitcoin’s latest attempt to surpass $28,000 has resulted in a retracement towards $27,600.
Hot Take: Bitcoin Faces Uphill Battle in Breaking $28,000 Resistance
Bitcoin’s current on-chain signals suggest that breaking the $28,000 resistance level will not be easy. The decrease in supply on exchanges indicates potential long-term bullishness, but low user interest and a lack of investor activity pose challenges for sustainable rallies. Additionally, the $27,900 level acts as a major resistance point due to short-term holders’ average cost basis. Bitcoin’s recent retracement towards $27,600 highlights the difficulty it faces in surpassing the crucial $28,000 level. To overcome these obstacles, Bitcoin needs a significant increase in user interest and trading activity.
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