Bitcoin Eyes $40,000 as On-Chain Data Shows Thin Resistance Levels
According to data from market intelligence platform IntoTheBlock, Bitcoin may have a smooth path towards the $40,000 mark as there is little resistance ahead. In on-chain analysis, resistance and support levels are determined based on whether a large number of investors bought their coins at certain price levels.
Holders often react to the spot price retesting their acquisition price. If the price retests an investor’s cost basis from below (when they were in loss previously), they may sell their coins out of fear of further decline. Conversely, if the retest is from above (when they were in profit previously), they may accumulate more coins.
While individual buying and selling actions may be insignificant, when a large number of investors have their cost basis within a specific price range, that range can act as support or resistance for the asset.
Bitcoin Concentration Levels
The concentration of investors who bought Bitcoin at various price ranges can be seen in the chart below:
Bitcoin’s Current Price and Outlook
Bitcoin has surged over 12% in the past day and is currently trading around $34,400. With thin resistance levels ahead and a high concentration of investors in profit, Bitcoin has a potential path towards reaching $40,000. The on-chain data suggests that this upward movement should not face significant hurdles.
Hot Take: Bitcoin’s Path to $40,000 Looks Promising
Based on on-chain data and the concentration of investors in profit, Bitcoin seems to have a favorable environment for reaching the $40,000 level. With little resistance ahead, the current rally has the potential to continue its upward trajectory. It remains to be seen whether Bitcoin can sustain this momentum and achieve its target, but the signs are promising.
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