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In recent weeks, the Bitcoin price has not been able to keep a meaningful momentum in the journey to restore its six-digit appreciation. After falling to just above $ 81,000 on Tuesday, March 18, the flagship pushed cryptocurrency on the $ 87,000 before he received a considerable level.
Below is why the level of $ 87,000 can be crucial for health in the long term of the Bitcoin price.
5.58 million BTC addresses ‘are on a hot potato’
In a post of March 21 on the X platform, popular crypto analyst Haartunn discussed The meaning of $ 87,000 as a crucial level for the future process of the Bitcoin price. The reasoning behind this specific analysis is the average cost basis on chains of different BTC investors.
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Cost -based analysis includes evaluating the capacity of a price level to act as resistance or support based on the total amount of coins purchased in or around it. As observed in the graph below, the size of the dot reflects the number of coins purchased within a certain price bracket. (Hence the strength of the support or resistance area).
According to Marchunn, around 5.58 million addresses have purchased 3.79 million BTC (worth $ 367 billion at an average price of $ 97,059) between the $ 87,867 – $ 106,839 region between the region. The analyst noted that the investors here “sit on a hot potato” and in red, because they all bought at prizes well above the current price.
This $ 87,867 – $ 106,839 region usually serves as a crucial resistance area, because investors probably sell their assets as the Bitcoin price return on their cost -based. This sales activity would exert downward pressure on the most important cryptocurrency and hind the further upward price movement.
In addition, Haar tunn identified investors within the region of $ 87,867- $ 106,839 as holders in the short term, a class of investors who are known to be “vulnerable” and are more reactive for small market movements. That is why the analyst noticed that this might not be an ideal scenario, especially if the market sees another wave of Bearish.
Short -term holders have been associated with considerable sale events (in response to price fluctuations). Ultimately, this means that the Bitcoin market could experience a serious capitulation event if the short-term investors in the $ 87,867- $ 106,839 region are forced to realize their losses.
Bitcoin -price at a glance
At the moment the price of BTC is floating around $ 84,000, which does not reflect a significant change in the last 24 hours.
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Featured image of Istock, graph of TradingView
