The Bitcoin price showcased remarkable resilience in recent times, experiencing a strong rally that saw it surpass the $88,000 mark early this week. However, following the release of February’s core inflation data, the premier cryptocurrency faced a significant correction on March 28, causing it to hover just below the $84,000 threshold. This sudden dip has sparked concerns among investors about a potential further downtrend for the world’s largest digital asset.
Recent on-chain data have shed light on critical support levels that could play a pivotal role in Bitcoin’s price action going forward.
Is BTC At Risk Of A Fall To $71,000?
In a recent assessment shared on the X platform, blockchain analytics firm Glassnode provided insights into current investor behavior and its implications for Bitcoin’s trajectory. This analysis draws upon the cost basis distribution data of Bitcoin holders, which illustrates the average acquisition cost of BTC across different price levels.
Glassnode’s findings highlight that a notable percentage of traders acquired approximately 15,000 BTC around the $78,000 mark on March 10, subsequently selling as prices surged to the recent local top near $87,000. This activity has led to a thinner supply cushion at the $78,000 level, raising questions about the sustainability of support at that point.
The on-chain data indicates that immediate support zones for Bitcoin are forming around the prices of $84,100, $82,090, and $80,920, where investors collectively purchased significant quantities of BTC (40,000 BTC, 50,000 BTC, and 20,000 BTC, respectively). If Bitcoin fails to maintain these levels, a deeper correction could be on the horizon.
Furthermore, given the recent sell-off by investors who previously positioned themselves at $78,000, there is a possibility that this price point may not provide adequate support in the event of a downturn. Glassnode suggests that Bitcoin could plunge to as low as $74,000, identified as the next major support level following the $80,000 mark.
Particularly, the firm highlights the importance of the $74,000 and $71,000 levels, where substantial accumulation has occurred (49,000 BTC and 41,000 BTC, respectively). These price points are crucial as they could absorb additional downward pressure, thereby maintaining investor confidence during turbulent times.
Bitcoin Price At A Glance
As of this writing, Bitcoin’s price stands at approximately $83,800, reflecting a near 4% decline within the last 24 hours.
