Crypto analytics firm Glassnode says that Bitcoin (BTC) needs to hold one key price range or a massive sell-off is likely.
In a new analysis, the firm says that Bitcoin transaction data shows a key support level of $30,000.
“Where might Bitcoin hold or fold? Our latest ‘Chart Of The Week’ video pinpoints crucial cost basis clusters, with key insights for your trading and investment strategies.”
The firm looks at Bitcoin’s URPD, or UTXO (unspent transaction output) realized price distribution, which keeps track of the number of existing coins that last moved within a given price range.
“We can see a significant accumulation of coins between $25,000 and $31,000, suggesting a strong support zone around the $30,000 mark. If you remember from our previous videos, this is the zone that was dominated by short-term holders, where we saw a bulk of this new demand enter the market, and now that the price is around 20% higher than the cost basis of this cluster at least some of these investors are more likely to accumulate into their cost basis, rather than sell should these levels be retested.
Just above this cluster, we can see a bit of a gap here between $31,000 and $33,000 suggesting fewer transactions were made at this range, and this poses as a potential weak spot. If price were to fall below this $33,000 mark, then we could be looking at $30,000 as the next line of defense.
For traders, this $30,000 to $31,000 range is crucial as it’s really the battleground between recent gains and the largest supply cluster and any drop below this could really trigger some sell-offs. So it’s definitely worth keeping a close eye on this level for potential buy or sell signals.”
Bitcoin is trading for $37,721 at time of writing, up 6.2% in the last 24 hours.