An analyst has explained using on-chain data that Bitcoin has a major demand bucket at the current price levels, so it wonโt 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 โUTXO Realized Price Distributionโ (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 โATH-partitioned.โ 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.
From the graph of the Bitcoin URPD, itโs 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 Saylorโs Microstrategy and Elon Muskโs Tesla, purchased a significant number of coins between these levels.
The levels being so dense with supply isnโt 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.
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.
โSo when they tell you โItโs too late to buy BTCโ or โWait for $20k,โ please ignore them!โ, advises the analyst.
BTC Price
Bitcoin is up almost 7% during the past week, but the coinโs 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
