The on-chain analytics firm Glassnode has identified a price range for Bitcoin that marks the current conflict between recent buyers and those taking profits.
Bitcoin Cost Basis Distribution Reveals Strong Resistance & Support Levels
In a recent post on X, Glassnode discussed the location of support and resistance levels for Bitcoin, utilizing the Cost Basis Distribution (CBD) indicator. This tool provides insights into the total supply that last changed hands at various price points throughout the cryptocurrency’s history.
Related Reading
Below is the chart shared by the analytics firm, illustrating the trends in this metric over recent months.
The graph clearly shows that the CBD highlights two critical levels where a substantial portion of the cryptocurrency’s supply is concentrated (marked in red). The lower level hovers around $111,000, where significant buying activity occurred during the recent bearish phase.
The second level is approximately $117,000, comprised of investors who acquired Bitcoin during the price surge to the all-time high (ATH). Naturally, these investors may find themselves at a loss currently, while those who bought at $111,000 would be in the green.
Generally, holders exhibit sensitivity to retesting their cost basis, often reacting in some manner during these events. Given that these two levels represent the cost basis for many investors, it’s plausible that a revisit could trigger either panic selling or buying.
The dominant behavior in such cases often hinges on market sentiment and the direction of the retest. If the retest occurs from above, investors might opt to purchase more, anticipating that the same cost basis level will yield profits again in the future. Conversely, holders experiencing losses before the retest may react by selling, fearing another downturn.
Taking these dynamics into account, the $111,000 level could be seen as a vital support area for Bitcoin, with $117,000 acting as a resistance point. “This range represents the ongoing battle between recent buyers and those taking profits,” stated Glassnode.
Related Reading
It remains to be seen which price point BTC will approach next, and how the retest will unfold. “A breakthrough in either direction could set the stage for the next significant movement,” the analytics firm explained.
In other news, the Stablecoin Supply Ratio (SSR) Oscillator has recently been at cycle lows, as highlighted by Glassnode in another X post. This oscillator evaluates the SSR, comparing the circulating supply of Bitcoin against that of stablecoins.
The SSR Oscillator is currently at a low level, indicating that Bitcoin’s supply is diminished relative to stablecoin liquidity. “Historically, such instances precede stronger bidding support when market confidence is restored,” stated the analytics firm.
BTC Price
Bitcoin experienced a retracement to $113,500 earlier but has quickly rebounded, returning to $115,400.
Featured image from Dall-E, Glassnode.com, chart from TradingView.com
