Bitcoin Loses On-Chain Support Zone
Bitcoin has slipped below a crucial on-chain support zone, indicating a potential drop in price. This range represents the cost basis for many investors, and a retest of this level can impact their profit-loss balance.
Investor Reactions to On-Chain Support
Investors react differently based on their profit or loss position. Those who had been carrying profits may buy more of the asset, believing that the same price range could be profitable again. Conversely, investors who were previously in a loss may sell when the price reaches their break-even point.
While individual reactions may not impact the market significantly, if many holders react in the same way, it can cause price fluctuations.
Potential Support and Resistance Zones
The chart reveals that the $37,400 to $38,700 range could provide substantial on-chain support, with 1.28 million addresses having their cost basis in this range. If Bitcoin continues to decline, it could reach as low as $38,000.
The current $41,200 to $42,400 range could also become resistance if these addresses become loss holders desperate to sell.
Bitcoin Price Update
Bitcoin briefly dropped to around $40,500 but has since recovered to $41,600. The support level may not be completely lost yet.
Hot Take: Bitcoin Faces Critical Test of On-Chain Support
Data shows that Bitcoin is currently losing a significant on-chain support zone. This development raises concerns about further price declines and potential resistance levels. Investors’ reactions to on-chain support can influence market dynamics and cause fluctuations in price. As Bitcoin hovers near key support levels, it faces a critical test that could determine its future trajectory. Traders and investors need to closely monitor these levels and the market sentiment to make informed decisions. The next major support zone at $37,400 to $38,700 will be a crucial area to watch, as it has a significant number of addresses with their cost basis in this range.
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