These Price Levels Hold the Key to Bitcoin’s Resilience or Deeper Correction (Glassnode)
The on-chain data analysis platform Glassnode has identified several price levels that hold the key to bitcoin’s (BTC) price trajectory in the coming weeks. Depending on which direction the leading digital asset goes, there could be a massive correction or strong resilience that could enable positive price movement.
According to Glassnode’s tweet, these price levels were obtained by analyzing the Cost Basis Distribution (CBD) metric, which measures the total Bitcoin supply held by addresses with an average cost basis within specific price ranges.
Bitcoin’s Bottom Discovery Region
One key observation from analyzing the CBD is that BTC has a dense supply between the $88,100 and $103,000 levels. This means that many investors are offloading their bitcoins within these price levels, most likely to realize profits.
Below the dense supply cluster is an area with a much lower supply concentration—an air gap between $70,000 and $88,100. This means this region has much less supply than between the $88,100 and $103,000 levels.
Glassnode revealed that the implication for the air gap level is that the zone could act as a bottom discovery region if BTC enters a prolonged price contraction phase. During a bottom discovery phase, BTC could plunge to new weekly and monthly lows every now and then, just like it hit a record high daily during its price discovery phase in the aftermath of the U.S. presidential elections.
The silver lining about the air-gapped region is that crypto investors and new buyers could become more eager to accumulate BTC at a relative discount. Bitcoin falling to $70,000 could trigger massive buying among market participants, who anticipate substantial gains when the cryptocurrency rallies above $100,000 again.
Resilience or Massive Correction?
Interestingly, bitcoin has a significant chance of trading within the air-gapped region because it has been hovering around $88,100, the lower band of the dense cluster supply region, since mid-December. The price level also serves as the higher band of the air gap area.
Data from CoinMarketCap showed BTC changing hands at $96,000 at the time of writing after trading around $91,400 barely two days ago.
Regardless, Glassnode said $98,000 is a level where BTC buyers have remained resilient despite market fluctuations; hence, the region represents a critical zone of interest for price action.
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