The data shows that Bitcoin is currently retesting an important on-chain resistance level, and a break above which could potentially lead to a rise in its price.
Bitcoin has major on-chain resistance around $67,000
As analyst Ali pointed out in a publish at X, BTC could see a rise towards the $72,900 level if the asset can break the current chain resistance barrier.
In on-chain analysis, the potential of any level to act as support or resistance is measured using the amount of Bitcoin that has been acquired/bought by investors around that level.
The analyst shared the chart for “Distribution of UTXO realized prices” (URPD) indicator from Glassnode, which reveals how the various levels are around the current spot value of BTC based on the density of supply that was last purchased in them.
Looks like there is significant resistance coming up ahead at the $72,900 mark | Source: @ali_charts on X
The URPD here is “partitioned ATH”, which means that the price ranges here are defined by dividing the levels between zero and the current all-time high (ATH) into 100 equal partitions.
From the chart, it is visible that the partition around the $66,990 level carries the cost basis of a notable amount of supply at the moment (1.3%). This is also the range that BTC is currently retesting.
Generally, the cost basis is a special level for investors and therefore they tend to be more likely to show some reaction when a retest occurs. If a large number of holders share their cost base within the same narrow range, then this reaction could result in a scale that could be relevant to the market.
As for which direction this reaction from holders is likely to happen depends on which side the retest is taking place from. A retest from below (meaning that these holders had suffered losses before the retest) could lead to a sell-off reaction in the market.
This is because these investors may not want to risk the cryptocurrency declining again in the future, so exiting while they have the opportunity to break even may be tempting.
As such, retests like these can cause the asset to feel some degree of resistance. In the current case, the range is notably filled with currencies, so it is possible that the strength of this resistance is equally powerful.
From the chart, it is visible that after this range, the asset potentially does not face strong on-chain resistance barriers until the $72,879 level, which houses the cost base of about 1.61% of the supply. “If Bitcoin manages to break above $66,990, it will likely rise to $72,880!” says Ali.
BTC Price
Bitcoin has been going up the previous day, with its price now reaching the $67,200 level. If this increase is sustained, the asset would pass through the current resistance block.
The price of the coin appears to have been going up over the past couple of days | Source: BTCUSD on TradingView
Featured image by Kanchanara on Unsplash.com, Glassnode.com, chart from TradingView.com
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