Bitcoin’s Resistance Levels According to On-Chain Data
Bitcoin has recently surpassed the $27,000 mark, prompting questions about how long this upward trend will continue. To assess its potential trajectory, on-chain analysis can be used to identify major resistance levels.
In on-chain analysis, resistance levels are typically found where many investors have purchased coins, known as their cost basis. This is because holders often sell when the spot price reaches or exceeds their acquisition price to avoid losses.
When a significant number of investors have their cost basis within a specific price range, it creates selling pressure that can act as resistance for the asset.
Bitcoin’s Cost Basis Concentration
According to data from the market intelligence platform IntoTheBlock, here is a breakdown of Bitcoin’s price ranges based on investor cost basis concentration:
[Insert data visualization from IntoTheBlock]BTC Price Update
Currently, Bitcoin is hovering around the $27,200 level, representing a 4% increase over the past week.
[Insert Bitcoin price chart]Hot Take: The Battle with Resistance Continues
As Bitcoin continues its upward movement, it faces resistance at various price levels due to the concentration of investor cost basis. These resistance levels represent psychological barriers for holders who may be inclined to sell once their acquisition price is reached. Therefore, monitoring these levels can provide insights into potential selling pressure and the overall trajectory of Bitcoin’s price. By understanding the dynamics of resistance and analyzing on-chain data, investors can make more informed decisions in navigating the cryptocurrency market.
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