Bitcoin’s strength did not carry on for a long time. On Monday, it made an attempt to run past the resistance around $10,000. However, after the said attempt, the cryptocurrency strongly reversed. Bitcoin dropped to $8,950 or almost 9% below the week’s highs on Wednesday. Despite the rapid reversal, data reveals that there is on-chain levels support in the case of Bitcoin price decline.
Bitcoin Is Right About to Go into a Concourse of On-chain Levels Support
Bitcoin seems to be on a slippery slope back into a bull market. Nevertheless, it is about to enter a region of on-chain support.
The CTO of blockchain analytics firm, Rafael Schultze-Kraft, said that Bitcoin would find support levels at $9,300, $8,910, $8,710, and $7,320. He was referring to the UTXO Realized Price Distribution (URPD) indicator.
The indicator ascertains at what price all Bitcoin in circulation was last moved on the blockchain. The data gives users support and resistance levels.
According to the history, if Bitcoin can find support at these on-chain levels, a rally may follow immediately.
In 2019, after Bitcoin reclaimed a URPD support level, Bitcoin doubled from the $7,000s to $14,000. In a similar manner, the indicator also predicted medium-term market tops in September and October of last year.
Important Technical Levels to Consider
The levels that were mentioned above were from on-chain data. Moreover, there are essential technical levels that bulls similarly should hold.
The most notable level is $8,500, as it has been acting as a bullish reversal point for drawdowns over the past two months. For instance, Bitcoin bounced at that level in May to go back to $10,400.
Josh Rager commented about the Bitcoin range.
The trader who predicted that Bitcoin would revisit $3,000s in 2020 recently shared a chart saying: “bulls better pray below $8,500”.
Similarities between Bitcoin’s decline from $10,500 to $3,700 in February and March and the recent consolidation were portrayed. The innuendo is that once Bitcoin go below $8,500, a revived March’s capitulation could occur.