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Over the past few weeks, the Bitcoin price has not been able to sustain any meaningful momentum in the journey to recover its six-figure valuation. After falling to just above $81,000 on Tuesday, March 18, the flagship cryptocurrency pushed for the $87,000 mark before facing a significant level.
Below is why the $87,000 level could prove pivotal to the long-term health of the Bitcoin price.
5.58 Million BTC Addresses ‘Sitting On A Hot Potato’
In a March 21 post on the X platform, popular crypto analyst Maartunn discussed the significance of $87,000 as a crucial level for the future trajectory of the Bitcoin price. The reasoning behind this specific analysis is the average on-chain cost basis of several BTC investors.
Cost-basis analysis involves evaluating the capacity of a price level to act as either resistance or support based on the total amount of coins purchased in or around it. As observed in the chart below, the size of the dot reflects the number of coins bought within a particular price bracket. (hence the strength of the support or resistance area).
According to Maartunn, about 5.58 million addresses acquired 3.79 million BTC (worth $367 billion at an average price of $97,059) between the $87,867 – $106,839 region. The analyst noted that the investors here are “sitting on a hot potato” and in the red, as they all bought at prices well above the current price.
Typically, this $87,867 – $106,839 region serves as a crucial resistance area, as investors are likely to sell their assets should the Bitcoin price return to their cost basis. This selling activity would put some downward pressure on the premier cryptocurrency, hindering the further upward price movement.
Furthermore, Maartunn identified the investors within the $87,867 – $106,839 region as short-term holders, a class of investors known to be “fragile” and more reactive to slight market movements. Hence, the analyst noted that this might not be an ideal scenario, especially if the market sees another wave of bearish pressure.
Short-term holders have been associated with significant sell-off events (in reaction to price fluctuations). Ultimately, this implies that the Bitcoin market could experience a severe capitulation event if the short-term investors in the $87,867 – $106,839 region are forced to realize their losses.
Bitcoin Price At A Glance
As of this writing, the price of BTC is hovering around the $84,000 mark, reflecting no significant change in the past 24 hours.
Featured image from iStock, chart from TradingView
Opeyemi is a proficient writer and enthusiast in the exciting and unique cryptocurrency realm. While the digital asset industry was not his first choice, he has remained absolutely drawn since making a foray into the space over two years. Now, Opeyemi takes pride in creating unique pieces unraveling the complexities of blockchain technology and sharing insights on the latest trends in the world of cryptocurrencies.
Opeyemi savors his attraction to the crypto market, which explains why he spends the better parts of his day looking through different price charts. “Looking” is a rather simple way to describe analyzing and interpreting various price patterns and chart formations. However, it appears that is not Opeyemi’s favorite part – in fact, far from it.
Being able to connect what happens on a price chart to on-chain movements and blockchain activities is what keeps Opeyemi ticking. “This emphasizes the intricacies of blockchain technology and the cryptocurrency market,” he would say. Most importantly, Opeyemi thinks of any market insights as the gospel, while recognizing that he is only a messenger.
When he is not clicking away at his keyboard, Opeyemi is most definitely listening to music, playing games, reading a book, or scrolling through X. He likes to think he is not loyal to a particular genre of music, which can be true on many days. However, the fast-rising Afrobeats genre is a staple in Opeyemi’s Spotify Daily Mix.
Meanwhile, Opeyemi is a voracious reader who enjoys a wide category of books – ranging from science fiction, fantasy, and historical, to even romance. He believes that authors like George R. R. Martin and J. K.
Rowling are the greatest of all time when it comes to putting pen to paper. Opeyemi believes his reading of the Harry Potter series twice is proof of that.
Indeed, Opeyemi enjoys spending most of his time within the four walls of his home. However, he also sometimes finds solace in the company of his friends at a bar, a restaurant, or even on a stroll. In essence, Opeyemi’s ambivert (haha! been searching for an opportunity to use the word to describe myself) nature makes him a social chameleon who is able to quickly adapt to different settings.
Opeyemi recognizes the need to constantly develop oneself in order to stay afloat in a competitive and ever-evolving market like crypto. For this reason, he is always in learning mode, ready to pick up the slightest lesson from every situation. Opeyemi is efficient and likes to deliver all that is required of him in time – he believes that “whatever is worth doing at all is worth doing well.” Hence, you will always find him striving to be better.
Ultimately, Opeyemi is a good writer and an even better person who is trying to shed light on an exciting world phenomenon – cryptocurrency. He goes to bed every day with a smile of satisfaction on his face, knowing that he has done his bit of the holy assignment – spreading the crypto gospel to the rest of the world.
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