Bitcoin Accumulation at $25,000 to $30,000 Range
An analyst named Ali has examined on-chain data and revealed that there was significant buying activity for Bitcoin between the price range of $25,000 and $30,000. This information is based on the UTXO Realized Price Distribution (URPD) indicator, which measures the amount of Bitcoin acquired at different price levels.
This chart illustrates the current URPD for Bitcoin:
Entities such as Microstrategy and Tesla, led by Michael Saylor and Elon Musk respectively, made substantial purchases within this range.
Significance of Dense Price Levels
The density of supply at these levels is not only important because it reflects the belief of large entities in the value of Bitcoin at those prices, but also because it impacts investor psychology. When the price retraces to a holder’s cost basis, their reaction may vary depending on their sentiment and profit/loss status.
If they were in profits before the decline, they may view the dip as an opportunity to accumulate more Bitcoin with the expectation that the price will rise again. Conversely, if they were at a loss before, they may choose to sell at their cost basis to break even.
There are also dense price buckets above the current level, indicating potential resistance when Bitcoin retests those levels as investors exit at break-even points.
Potential Support and Unlikelihood of Decline
However, if Bitcoin experiences a decline instead, it could find strong support due to major demand zones below the current level. Some investors may be inclined to buy more Bitcoin at these same levels. Therefore, a decline below this range is unlikely for the cryptocurrency.
The analyst advises disregarding statements like “It’s too late to buy BTC” or “Wait for $20k” as the on-chain data suggests otherwise.
Bitcoin Price Consolidation
Over the past week, Bitcoin has seen a nearly 7% increase in price. However, its upward momentum has slowed down recently, with the price mostly consolidating around $28,500.
Hot Take: Bitcoin Accumulation Indicates Strong Support and Unlikelihood of $20,000 Price
An analysis of on-chain data reveals significant Bitcoin accumulation in the $25,000 to $30,000 range. This buying activity by large entities such as Microstrategy and Tesla indicates their belief in the value of Bitcoin at these prices. Additionally, investor psychology suggests that holders may react differently depending on their profit/loss status. There are also dense price buckets above the current level, potentially causing resistance during retests. However, if Bitcoin declines, it is likely to find strong support due to major demand zones below. Therefore, a decline below this range is unlikely. Disregard statements suggesting it’s too late to buy Bitcoin or to wait for $20,000 as the data suggests otherwise.
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