Bitcoin’s price is climbing again, recently surpassing $89,000. This upward movement has analysts looking beyond traditional chart analysis to understand what might happen next.
On-Chain Data: A New Lens on Bitcoin’s Price
Instead of just focusing on support and resistance lines, some are using on-chain data to predict price movements. This data looks at the average price various Bitcoin holders paid for their coins (their “cost basis”), categorized by how long they’ve held them.
Key Cost Basis Levels
One analyst highlighted some crucial cost basis levels:
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Short-Term Holders (~155 days): Their average cost is around $91,500. This acts as a significant resistance level. If Bitcoin goes above this, it suggests many recent buyers are now profitable, potentially fueling further upward movement.
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New Holders (1-3 months): Their average cost is roughly $83,700. This is a key support level. If the price falls below this, newer investors might start selling, leading to a price drop.
Understanding Investor Behavior
This analysis segments Bitcoin transactions based on how long the coins have been held. By calculating the realized price for each group, analysts can see where investors are making or losing money. This gives a clearer picture of market sentiment than short-term price fluctuations alone.
What the Future Holds
If Bitcoin breaks through the $91,500 resistance, it could signal a strong bullish trend. However, falling below the $83,700 support could trigger significant selling pressure. The on-chain data provides a more nuanced view of the market, moving beyond simple technical analysis.