An analyst has revealed how this Bitcoin support level could be a key one to watch, due to the pattern forming in this on-chain indicator.
Bitcoin URPD Hints At A Significant Supply Cluster Around $97,500
In a new post on X, analyst Ali Martinez has talked about where the support lies for Bitcoin according to on-chain data. The metric of interest here is the “UTXO Realized Price Distribution” (URPD) from the analytics firm Glassnode.
The URPD tells us about the percentage of the BTC supply in circulation that was last purchased/transferred at the various price levels that the cryptocurrency has visited in its history.
Below is the chart shared by the analyst, that shows how the URPD appears for Bitcoin today.
A significant amount of supply appears to have been purchased at the $97,500 mark | Source: @ali_charts on X
As displayed in the graph, there are a few Bitcoin price levels that particularly stand out in terms of the amount of supply that has its cost basis at them. Out of these, the most dense level is $97,500, which hosts the acquisition price of around 3.1% of all tokens in circulation.
To any investor, their cost basis is an important level and they are likely to show some kind of reaction whenever a retest of it happens, as it could mean a potential flip of profit-loss status for them.
This reaction is naturally not relevant to the market if only a few investors show it at once, but when a large amount of them share their cost basis around the same price level, then a sizeable reaction may be produced.
A large number of investors bought at the $97,500 level, so it’s likely that a retest of it could end up triggering significant activity in the market as these holders make panic moves.
During a bull run, the investors who were in profit prior to such a retest (that is, when the price touches their cost basis from above) are more likely to react by buying more.
The reason behind this is that these holders could think that the same level would end up proving profitable again in the future, so they decide to buy on the ‘dip.’
As such, the $97,500 level with its dense supply cluster could end up acting as a major point of support for Bitcoin. If BTC ends up losing this level, though, all of these investors would go into the red and might end up acting as resistance when the price travels back up. “Holding above this level is crucial to maintaining the current bullish momentum,” notes the analyst.
BTC Price
Bitcoin hasn’t been able to make any progress in either direction during the last few days as its price is still trading around the $105,700 mark.
Looks like the price of the coin has been quite stale recently | Source: BTCUSDT on TradingView
