On-chain data indicates that the Bitcoin spot price is currently sandwiched between two critical zones where a significant number of investors last acquired their coins.
Bitcoin Is Trading Between Two Major On-Chain Demand Zones
In a recent post on X, analyst Ali Martinez has analyzed the current key on-chain support and resistance levels for Bitcoin. As elaborated in on-chain analysis, these levels are identified based on the cost basis of investors.
This framework highlights that holders tend to be particularly sensitive to retests of their break-even price. The response of an investor to a retest at this level can be influenced by various factors, including the nature of the retest and prevailing market sentiment.
Typically, holders may be inclined to accumulate more if a retest occurs from above (indicating they were previously in profit). They might believe that this level will become profitable again in the future.
Conversely, investors who are underwater at the time of the retest may choose to exit, driven by fears of additional declines in the asset’s price.
While isolated reactions from a few investors may not significantly impact Bitcoin’s price, scenarios involving a broader group engaging in these buying or selling actions can lead to noticeable fluctuations in the market.
The chart provided by the analyst illustrates the distribution of holder cost basis around the current BTC spot price:
The graph reveals that Bitcoin has recently managed to surpass a significant supply wall, achieving recovery within a cost basis center between $93,700 and $96,600, involving 2.13 million addresses that accumulated a total of 1.39 million BTC in this range.
Bitcoin is currently poised to challenge the $96,900 to $98,700 range, which encompasses the cost basis of 750,800 BTC. Given that these investors are holding positions at a loss, there may be challenges in breaking through this resistance zone.
On the positive side, the transformation of the more substantial $93,700 to $96,600 range into a support level suggests potential optimism. This strong support zone could cushion Bitcoin during subsequent rejections, allowing for a more stable price action.
However, if this support fails, Bitcoin might face a lack of significant zones until the $82,000 to $85,000 range. The critical question remains whether demand will be sufficient to sustain the ongoing price recovery for Bitcoin.
BTC Price
At the time of writing, Bitcoin is trading around $96,800, representing an increase of over 2% in the last week.
