Over the last couple of days, Bitcoin has been flirting with the $80,000 mark, but downward pressure is definitely present. Examining blockchain data reveals a crucial support zone between $78,000 and $80,920 that must hold.
Specifically, on-chain analysis provided by Glassnode suggests weakening support around the $78,000 level. There isn’t much in the way of established cost basis clusters there anymore. This observation follows a period where sophisticated traders purchased nearly 15,000 Bitcoin at the low point on March 10, then sold them for a profit near the $87,000 peak.
Support Level Strengthens Between $80,000 and $84,000
March started with a sharp dip for Bitcoin, briefly falling below $77,000 around March 10th and 11th. The rest of the month has largely been a recovery, with Bitcoin eventually reaching approximately $88,500 last week.
Interestingly, Glassnode’s on-chain data shows that some Bitcoin holders strategically acquired approximately 15,000 BTC during this dip. However, many of the same addresses subsequently sold at the $87,000 high point. This has left behind a diminished support area, suggesting less price stability at that level.
The strongest cost basis clusters for Bitcoin have gradually moved upwards from $78,000 throughout March. The most significant support zones are now situated between $80,920 and $84,100. Roughly 20,000 BTC were purchased near $80,920, 50,000 BTC around $82,090, and another 40,000 BTC around $84,100. These recent accumulations represent new areas of confidence for buyers and could provide a cushion during market pullbacks.
Currently, Bitcoin is trading around $83,120, meaning it has fallen below the cluster of 40,000 BTC around $84,100. This puts focus on the $82,090 and then the $80,920 price levels. If the correction deepens significantly, firmer support levels can be expected at $74,000 and $71,000, based on long-term buying conviction, estimated at 49,000 BTC and 41,000 BTC, respectively.
Image Source: X (Glassnode)
$95,000 Resistance Area Builds Amidst Slowing Demand
While support is gradually moving upwards, resistance seems to be solidifying near the $95,000 price point. Investor cost basis data shows an increase of 12,000 BTC clustered at this level since March 24th.
This suggests that some investors are anticipating a price ceiling around $95,000, potentially leading to increased selling if Bitcoin approaches that area. This resistance, combined with the existing support levels, may result in Bitcoin trading within a tighter range in the near future.
Glassnode data indicates that long-term Bitcoin holders (addresses holding Bitcoin for over 150 days) have primarily been realizing profits recently. The profits taken by long-term holders are now closely matched by the losses experienced by short-term traders, those holding Bitcoin for under 155 days.
Image Source: X (Glassnode)
Featured image courtesy of Tech Research Online, chart data from TradingView