An analyst has explained how Bitcoin could be positioned for new all-time highs (ATHs) if it can break through this on-chain resistance level.
Bitcoin On-Chain Data Could Suggest This Level Holds Major Resistance
In a new post on X, analyst Ali discussed Bitcoin’s current on-chain resistance. In on-chain analysis, the strength of support and resistance levels is based on the total amount of cryptocurrency last acquired at each level.
Below is a chart for Glassnode’s UTXO Realized Price Distribution (URPD) metric, which shows the supply distribution across the various price levels based on where the investors bought their coins.
From the graph, it’s visible that in terms of the levels currently ahead of the spot price, the $66,250 mark stands out as it hosts the cost basis of over 2% of all Bitcoin UTXOs.
Generally, the cost basis is a special level for any investor, and they are naturally more likely to react when it is retested, as it can lead to a flip in their profit-loss situation.
The spot price retesting a level won’t produce much reaction if only a few investors share their cost basis around the level. Still, if many holders bought there, the cryptocurrency could see visible effects upon a retest.
Investors who are losing money may look forward to such a retest to exit out at their break-even point, as they may fear that the asset will fall back down again in the future, so getting away with their initial capital would seem like the ideal decision.
As such, a retest of a level dense with UTXOs from below can lead to a selling reaction in the market, making these levels points of strong resistance for Bitcoin.
Since the $66,250 level appears to be where the most coins were purchased out of the levels ahead, this level could be the toughest one to break for the cryptocurrency.
On the brighter side, though, the levels after this point are relatively thin. “Once BTC breaks past this level, it will be positioned for new all-time highs!” explains the analyst.
The market intelligence platform IntoTheBlock has also discussed about on-chain cost basis distribution in an X post today. As revealed by the firm, around 10% of all addresses acquired their coins between the current spot price and the all-time high the asset set back in March.
This would naturally mean that 10% of the total addresses, equivalent to 5.16 million, are in the red on the Bitcoin network.
BTC Price
Bitcoin has continued to move in its recent range, with its price currently trading around the $62,800 level.
Featured image from Erling Løken Andersen on Unsplash.com, Glassnode.com, IntoTheBlock.com, chart from TradingView.com