Data indicates that Bitcoin is relinquishing a significant on-chain support area in its recent decline. Here’s the upcoming range where the next support zone for the asset is situated.
Bitcoin Dips Below Support Range, Falling to $41,200 – $42,400 Level
As outlined by analyst Ali in a post on X, Bitcoin (BTC) has slipped below a crucial on-chain support zone today. An “on-chain support” range refers to a price below the current market value of the cryptocurrency, representing the cost basis for many investors.
For investors, the cost basis, or the price at which they acquired their coins, holds significance as it represents a fundamental level that can impact their profit-loss balance. Investor psychology plays a role, with a retest of the cost basis potentially influencing their actions.
If the retest occurs from above, indicating prior profits, the investor may choose to buy more of the asset, anticipating future profitability within the same price range. Conversely, an investor who had previously incurred losses might be inclined to sell when the price reaches their break-even point, avoiding further losses if the asset experiences a subsequent decline.
While individual investors’ reactions may not be universally relevant, a collective response from many holders can cause market fluctuations.
Examining the chart depicting different price ranges for Bitcoin based on the number of addresses that bought at those levels, the range between $41,200 and $42,400 appears substantial, with 1.87 million addresses holding 727,520 BTC at these levels.
Bitcoin has been fluctuating within this critical support region in recent days, suggesting potential weakening. If this range is breached, BTC may experience a prolonged decline toward the subsequent significant support zone.
The chart indicates that the $37,400 to $38,700 range could be the next substantial on-chain support, with 1.28 million addresses having their cost basis within this range. Consequently, Bitcoin may face the risk of descending to around $38,000 (the average price of the range) in the near future. In such a scenario, the current $41,200 to $42,400 range could also transform into resistance, as holders within this range become loss bearers seeking an exit.
BTC Price Update
Bitcoin experienced a dip to around the $40,500 level in the last 24 hours but has since rebounded, reaching the $41,600 mark. It seems that the support may still be intact.
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