A significant demand zone has emerged just beneath Bitcoin’s current trading price, driven by robust buying activity. According to on-chain data from IntoTheBlock, 2.76 million addresses have collected 2.1 million BTC within this price range, thereby establishing a strong support foundation. This notable information surfaces during a period of considerable price compression as Bitcoin fluctuates within a range below the $100,000 threshold.
Bitcoin Bulls Establish Demand Safety Net
Over the past week, Bitcoin has remained confined in a narrow trading range below the $100,000 level, characterized by repeated attempts to break higher coupled with selling pressure. The initial part of last week saw a significant drop, with Bitcoin briefly falling beneath $94,000 before bouncing back at $93,700. This level prompted a slight rebound of around 6% mid-week, but it was insufficient to surpass $100,000, as the rally faced rejection again near $99,300.
Analytics from IntoTheBlock indicate that amid this price fluctuation, Bitcoin bulls have shown an intriguing buying trend this week, leading to the formation of a solid support base for the future. Notably, the price level of $97,100 has gained importance, with numerous BTC transactions occurring at this range. Specifically, 2.76 million Bitcoin addresses procured a total of 2.1 million BTC between the prices of $95,830 and $98,700, highlighting substantial buying interest at this level.
This data was derived from IntoTheBlock’s In/Out of the Money Around Price metric, which effectively illustrates the buying distribution of addresses that purchased Bitcoin between $83,800 and $106,800.
Image Source: IntoTheBlock
What Implications Does This Hold for Bitcoin’s Price?
The emergence of this new demand zone carries significant weight, as it constitutes a strong base of holders likely to intervene to support the price during any further declines. This zone also offers a more solid backing for Bitcoin to ultimately make a decisive breakout above $100,000.
It’s important to note that the ongoing conflict between buying and selling forces has caused this demand zone to be tested once again, with Bitcoin dropping in the last 24 hours and now trading within this range. If this support level holds, Bitcoin could establish a higher low and sustain its bullish momentum. Conversely, falling below this support could trigger another test of the $93,000 support level.
As crypto analyst Ali Martinez observed, the optimal strategy for trading Bitcoin currently is to buy at the $92,000 mark and sell near the $106,000 resistance area. The analyst also recommended waiting for a clear breakout beyond the $92,000 to $106,000 range before making significant market entries.
At the time of writing, Bitcoin is trading at $96,570.
Featured image courtesy of Business Insider, chart sourced from TradingView
