Bitcoin (BTC) On-Chain Analysis – Resistance at $24,000 Level?

Bitcoin retraces below $22,000

Following the surge in prices in January 2023, the Bitcoin (BTC) price rose to test $24,000, before entering a narrow range in the $23,000 area.

Last week, the price of BTC came to break from below this range to stabilize below 22,000 dollarsinitiating a new lateralization.

Figure 1: Daily price of BTC

While the upward trend initiated at the start of the year is slowing down, today we will be looking at price levels that BTC price has recently reacted to, potential support/resistance areas to watch.

To do this, we will take advantage of a metric mentioned several times during our previous analyses: distribution of realized prices of UTXO, or URPD.

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Potential support/resistance levels

By using the URPD, we can visualize the distribution of the acquisition prices of the BTCs in circulation and identify clusters of volumes that can slow down or accentuate a price movement.

The following chart represents the distribution of realized prices as of January 1, 2023. Here we can clearly see three major areas of interest:

• BTC dating from old cycles (in green)held for profit for several years, having a base cost of less than $11,000.
• BTC acquired in the current range zone (in orange)between $15,700 and $24,100, with impressive price concentration realized at the $16,400 level.
• BTC held at a loss since November 2022 ATH (in red)the majority of which were sold off during the bear market turmoil.

Figure 2: URPD (January 1, 2023)

We can note that the base cost of many entities was at the bottom of the orange zone at this time, providing robust support on the downside.

A month later (February 1, 2023), following a price increase bringing the price of BTC close to $24,000, the composition of the URPD changed to reach the breakdown below.

We can see that the rise in price caused realized prices to migrate to higher levelsincluded in the upper limit of the range (in dark orange), between 21,200 dollars and 24,100 dollars.

Figure 3: URPD (February 1, 2023)

In effect, over 800,000 BTC changed hands in this price range in one monthsignaling a noticeable profit-taking of BTC accumulated lower at the $16,400 level.

Moreover, we can note that BTC price ran into a low volume zone, located between $24,100 and $26,700which appears to be acting as resistance on the upside ever since.

Following the Crossing Base Costs of Multiple Holder Groupsthis obstacle represents an important psychological pivot which marks the border between lateralization and resumption of an upward trend.

Finally, following the recent return of the price below $22,000, the current realized price distribution denotes a net increase in BTC volume between $15,700 and $24,100which concentrates more than 29% of the supply in circulation.

Figure 4: URPD (February 14, 2023)

The upper bound has been added a total of 325,700 BTC since February 1, meaning that profit taking has slowed down as the price has fallen.

Now comprising just under two million BTC in a price range of just $3,000, between $21,200 and $24,100, breaking through this resistance zone and testing it as support are the conditions that would favor a healthy uptrend continuation.

note that the low volumes present between between $24,100 and $26,700 have the potential to create a draft which could propel BTC above $27,000 in the event of a break up.

Opposite this resistance zone is a widely recognized support zone, which has served as a bear market floor since November 2022.

Figure 5: URPD by age band (February 14, 2023)

Located between $15,700 and $16,400, and concentrating nearly 1.8 million BTC, this real wall includes both BTC accumulated during the November capitulation (1 month – 3 months) and BTC dating from previous cycles (4 years and more).

Covering a non-negligible latent profit, these BTCs were not spent during the January 2023 rise, which suggests that their holders are waiting for better prices to sell or simply do not intend to sell (HODling behavior).

If the price of BTC were to cross this support from below, the low volumes between $15,700 and $11,000 could create a draft here too and accelerate the fall of the market.

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Summary of this on-chain analysis of BTC

Finally, this week’s data indicates that the current range concentrates a dominant portion of the circulating supply (about 5.6 million BTC, or 29% of the supply) the majority of which is held for profit at the moment.

It looks like BTC price is establishing a new sideways move towards the upper limit of the range, located between 21,200 dollars and 24,100 dollars.

The in-depth study of the URPD and its variant by age band allows us to confirm that the price of BTC is compressed between:

• Resistance at the $24,100 levelwhich caused profit taking when the price approached it;
• Support at $15,700concentrating a large volume where BTC from old cycles and BTC accumulated during the November 2022 capitulation coexist.

Whether by a break from above or from below, the exit from this range is likely to generate a significant price movement, fueled by low volumes prices realized at both ends of this price range.

In the event of a bullish crossing, the price would quickly rise above $27,000, while in the event of a bearish breakout, the market could seek the $11,000 area.

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Sources – Figures 1-4: Glassnode; Figure 5: ChainExposed

On-chain analyst, fervent fighter of informational asymmetry.

My goal is to inform everyone about the state of Bitcoin (as an asset and a distributed network) through the prism of on-chain analysis.

Teacher. Chain

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