On-chain data suggests that bitcoin‘s next major support level could be $30,200 if the level pointed out by this analyst is lost.
bitcoin currently has support levels at $36,400 and $34,300
in a new mail Over at X, analyst Ali has discussed what the various btc support levels look like right now from an on-chain perspective. A level can be defined as support based on the amount of bitcoin that investors bought at that level.
In general, any time the price drops to an investor’s cost base, the more likely it is to show some type of movement. Since the holder had last made profits, he might tend to believe that the asset would rise again in the future, if the prevailing trend is bullish in the market.
Therefore, the investor might decide to buy closer to his cost base, thinking that it would prove to be a profitable “dip” purchase. Naturally, a few traders exhibiting this behavior will have no real effect on the price of the cryptocurrency. But if a large number of investors had bought at around the same price level, the asset’s retest at this level could cause a notable market reaction.
The purchases that emerge could provide support to the cryptocurrency. Now, to see these support levels, the analyst has cited the “UTXO Realized Price Distribution” (URPD) metric from Glassnode, which tells us about the amount of supply that was last acquired at each of the price levels that the asset has visited in is history.
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/11/Bitcoin-could-fall-to-30200-if-this-level-is-missed.jpeg" alt="bitcoin URPD” width=”2328″ height=”1448″ loading=”lazy”/>
Looks like the current price levels are thick with coins | Source: @ali_charts on X
As shown in the chart above, prices around $36,400 maintain the cost base of a notable amount of supply. However, the asset fell below this mark over the past day, implying that the cryptocurrency may be starting to lose this important support area.
If the asset fails to recover this level, the next major support level would be present at $34,300. A drop towards this mark would suggest losses greater than 5% for the asset.
However, this support level is thinner than the one the asset is currently retesting, meaning the level may not be able to prevent the asset from falling further.
If this scenario plays out, bitcoin would have support of around 16% below the current spot price of $30,200. From the chart, you can see that all price levels below this support area up to $25,000 house the cost base of a significant number of investors, meaning that these levels should represent a potentially impenetrable wall for the asset.
Therefore, a drop to $30,200 is possible in the near term if the $34,300 level is lost, but bitcoin is unlikely to fall further than that.
btc Price
bitcoin had been holding at $37,000 recently, but it appears that the asset has finally fallen as it is now trading below $36,300.
<img loading="lazy" decoding="async" class="alignnone size-medium aligncenter" src="https://www.tradingview.com/x/zYPZPwAx/" alt="bitcoin price chart” width=”1534″ height=”869″/>
btc has registered some decline during the past day | Source: BTCUSD on TradingView
Featured image by Kanchanara on Unsplash.com, TradingView.com charts, Glassnode.com
