Wait For Bitcoin At $20,000? This Analyst Says No
20 October 2023 - 5:00AM
NEWSBTC
An analyst has explained using on-chain data that Bitcoin has a
major demand bucket at the current price levels, so it won’t hit
$20,000 anytime soon. Huge Bitcoin Buying Occurred Inside The
$25,000 To $30,000 Range In a new post on X, analyst Ali has
explained that some large entities accumulated at the $25,000 to
$30,000 range. The indicator of interest here is the “UTXO Realized
Price Distribution” (URPD), which, in short, tells us about the
amount of Bitcoin that was acquired at the different price levels
of the cryptocurrency. Here is a chart that shows how the URPD of
the current Bitcoin market looks like: The data for the
distribution of the supply over the different price levels |
Source: @ali_charts on X Notice that the URPD here is
“ATH-partitioned.” What this means is that the price ranges here
have been defined by creating 100 equally spaced partitions between
zero and the all-time high (ATH) of the cryptocurrency. Related
Reading: This Rare Bullish Bitcoin Crossover Could Soon Form, Quant
Predicts When From the graph of the Bitcoin URPD, it’s visible that
the price levels between $25,000 and $30,000 are host to the cost
basis of a particularly large amount of the supply. Ali notes that
most people, including major institutional investors like Michael
Saylor’s Microstrategy and Elon Musk’s Tesla, purchased a
significant number of coins between these levels. The levels being
so dense with supply isn’t only significant because of the fact
that these large entities believe those prices were worthy buys,
but also due to how investor psychology tends to work out.
Generally, whenever the price retests the cost basis of a holder,
they may become more probable to show some reaction. How they would
react depends on their sentiment and profit/loss status prior to
the retest. If they had been i9n profits before the price declined
towards their cost basis, they may believe the price would go up
again in the future so they would accumulate more at the dip. On
the other hand, them being at loss before may make them sell at
their cost basis, as they would find the idea of breaking-even more
enticing than potentially going back into losses. There are some
dense price buckets above the current level, meaning that BTC could
feel resistance when it would retest them due to such investors
exiting at their break-even. Related Reading: Bitcoin Market Cap
Could Rise By $1 Trillion After Spot ETFs Launch: CryptoQuant If
Bitcoin declines instead, however, it could feel strong support, as
the buckets below are zones of some pretty major demand, so at
least some of these investors might be inclined to buy more at
these same levels. Thus, a decline below this range could be
unlikely for the cryptocurrency. “So when they tell you “It’s too
late to buy BTC” or “Wait for $20k,” please ignore them!”, advises
the analyst. BTC Price Bitcoin is up almost 7% during the past
week, but the coin’s surge has slowed down recently as its price
has mostly been consolidating around $28,500. The value of the
asset has continued to move sideways recently | Source: BTCUSD on
TradingView Featured image from Kanchanara on Unsplash.com, charts
from TradingView.com, Glassnode.com
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