Bitcoin Supply Wall Archives

On-chain data shows Bitcoin currently has a thick supply wall between the $60,300 and $62,155 levels that may prevent the asset from falling lower.

A Large Amount Of Bitcoin Was Bought Near Current Prices

As explained by analyst Ali in a new post on X, BTC has a major support wall just below it right now. In on-chain analysis, the strength of support and resistance levels is gauged through the amount of Bitcoin that the investors bought at them.

The chart below shows how the distribution of the investor cost basis has looked like for BTC across the price ranges near the current spot value:

Bitcoin Support

Here, the size of the dot represents the number of tokens that the addresses bought between the corresponding price levels. From the graph, it’s apparent that the $60,300 to $62,100 range has a particularly high density of coins right now.

Most of the price levels in this range lie just below the current spot price of the cryptocurrency, meaning that the investors who bought here would be making some profit, albeit only a slight one.

Generally, when the price retests the cost basis of such investors who were in profit prior to the retest (meaning that the price has approached their cost basis from above), a buying reaction may be produced by these addresses.

This is because holders like these may have reason to believe that if they were able to get into profits before, they might be able to do so again in the near future, so they may just accumulate on this “dip.”

Such a reaction can naturally provide support to the cryptocurrency. The scale of this support, however, is naturally not anything significant if only a few investors bought at the level to begin with. Narrow ranges that are thick with addresses, on the other hand, might just prove to be a source of noticeable support.

In the aforementioned price range near the current spot price, one million addresses acquired a total of about 671,000 BTC. “This accumulation zone highlights strong investor confidence and could serve as a crucial level of support for BTC, potentially cushioning against further drops,” notes the analyst.

While the price ranges under the current price are heavy with coins, it’s visible in the chart that this isn’t the case for the ranges above. Just like how supply wallets below can be a source of support, they can instead act as resistance when above.

The fact that the supply walls above are quite thin suggests that there wouldn’t be too many investors waiting to quickly exit at their break-even, and thus, selling pressure due to them should be low.

That said, it doesn’t mean there isn’t any impedance at all. Bitcoin is approaching all-time highs at this point, meaning that the vast majority of the supply is in profit. At these levels, mass selling for harvesting these gains can be the main challenge preventing the run from continuing.

BTC Price

At present, Bitcoin is trading around the $62,000 level, meaning that it’s right on the edge of the major support wall.

Bitcoin Price Chart

Bitcoin On-Chain Support And Resistance Levels Could Provide Hints For What’s Next

As explained by analyst Ali in a new post on X, Bitcoin has recently been floating between two major supply walls of the asset. “Supply wall” refers to the amount of Bitcoin that addresses acquired in any given price range.

The chart below shows what the different supply walls look like for BTC for the ranges around the current spot price of the cryptocurrency.

In the above graph, the size of the dot represents the number of coins the investors bought inside the corresponding range. It would appear that the $41,200 to $42,400 and $42,400 to $43,700 ranges are notably heavy with supply.

To be more particular, the former range saw 1.92 million addresses buy a total of 723,490 BTC, while the latter witnessed an accumulation of 706,400 BTC from 1.67 million holders.

For any investor, their acquisition price or cost basis is an important level, as when the asset’s price retests, their profit-loss situation can potentially change. As such, the holders are more likely to show some reaction when such a retest takes place.

Naturally, just a few investors displaying a reaction won’t affect the market, but if many addresses share their cost basis inside a narrow range, the reaction from a retest could end up being sizeable.

Because of this reason, major supply walls (like the two mentioned just earlier) can end up being important retests for Bitcoin. Generally, the asset is more likely to feel support when this retest happens from above, while the coin could feel some resistance when it’s from below.

These effects seem to follow because of how investor psychology tends to work; an investor who was in profit before the retest might want to take a further gamble, believing the same price range to be profitable again. Such buying is the source of the support.

Similarly, loss holders would be tempted to sell when the price reaches their break-even point, as they may not want to risk holding further as the coin could go back down, pulling them underwater again.

Bitcoin has been trading between two major supply walls during its recent consolidation. “A sustained close beyond these bounds will help gauge BTC’s trend,” notes Ali.

The chart shows that the next large resistance ahead is between $46,300 to $47,600, while $38,600 to $39,900 carries the next major support below. “A breakout above resistance may propel BTC towards $47,600, while a dip below support might lead to a correction down to $38,600,” explains the analyst.