Over the past week, the Bitcoin price exhibited one of its most impressive performances, surging above the $88,000 mark initially. Nevertheless, the leading cryptocurrency faced a significant correction on Friday, March 28, in response to the latest core inflation data from February.
With BTC currently trading around $84,000, there appears to be a growing sense of panic among investors who are concerned about a potential further decline in the value of the world’s largest cryptocurrency. Interestingly, the latest on-chain data reveals the key support levels for Bitcoin’s price.
Is BTC Vulnerable to a Drop to $71,000?
In a recent update on the X platform, blockchain analytics company Glassnode discussed current investor behavior and its possible implications for Bitcoin’s price action in the coming days. This analysis is derived from the cost basis distribution data concerning Bitcoin’s price.
According to Glassnode, the cost basis distribution data illustrates the overall Bitcoin supply held by addresses that have an average cost basis within certain price ranges. As depicted in the chart below, the heat map (color intensity) indicates the scale of BTC supply in various price zones.
Source: @glassnode on X. Glassnode analysis indicates that a considerable portion of traders acquired approximately 15,000 BTC at the $78,000 level on March 10 before liquidating at the recent local peak of $87,000. As a result of this latest round of selling, the BTC supply at the $78,000 level has significantly decreased, weakening its support foundation.
However, it is essential to highlight that the next vital support levels are around $84,100, $82,090, and $80,920, where investors bought 40,000 BTC, 50,000 BTC, and 20,000 BTC, respectively. The Bitcoin price may be at risk of a substantial correction if it drops below these levels.
If a deeper correction occurs, the $78,000 level may not provide adequate support for the leading cryptocurrency, especially after the recent sell-off by former holders at that price. Glassnode’s data suggests Bitcoin could fall to as low as $74,000, which would be the next significant support level following $80,000.
The on-chain analytics platform pointed out $74,000 (where investors acquired 49,000 BTC) and $71,000 (where investors obtained 41,000 BTC) as the subsequent support levels in the event Bitcoin drops below $80,000. “These levels signify conviction-driven accumulation areas that could withstand additional downside pressure,” Glassnode remarked.
Bitcoin Price Overview
As of the current moment, the price of Bitcoin is approximately $83,800, marking a decline of nearly 4% over the past 24 hours.
