Over the last couple of days, Bitcoin’s price has once again edged closer to the $80,000 mark. However, there’s a growing sense of vulnerability, with potential risks of a downward turn. Looking at the on-chain data, a critical support zone emerges between $80,920 and $78,000, and it’s crucial this level holds firm.

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Specifically, on-chain analysis from Glassnode highlights weakening support around the $78,000 level. It seems the robust support that was once there has thinned out. This observation comes after a notable market move where astute traders smartly accumulated nearly 15,000 Bitcoin around the March 10 low point, only to realize profits at the $87,000 local peak.

Support Cushion Rises With Clusters Forming Between $80,000 And $84,000

March began with a dramatic dip for Bitcoin, sending its price below $77,000 on both March 10th and 11th. For much of the month, Bitcoin focused on recovering from this dip, eventually rallying to reach as high as $88,500 just last week.

Interestingly, on-chain data from Glassnode reveals that some Bitcoin investors seized the opportunity during this price drop and purchased approximately 15,000 BTC at these lower prices. However, it appears many from this same group later sold off at the $87,000 local high. This activity has left behind a less substantial safety net, which may no longer provide the same level of price stability.

Throughout March, Bitcoin’s strongest areas of investor cost basis have been gradually shifting upwards from $78,000. The most significant support levels are now concentrated between $80,920 and $84,100. Specifically, around 20,000 BTC were bought at $80,920, 50,000 BTC at $82,090, and another 40,000 BTC around $84,100. These fresh accumulations represent the new zones where recent buyers feel confident, potentially offering some cushion against the latest market pullback.

Currently, Bitcoin is trading at $83,120, which means it has already dipped below the zone where 40,000 BTC were accumulated around $84,100. This now places the focus on the $82,090 level and, subsequently, the $80,920 price point for support. However, should the correction intensify further, more substantial structural support is expected to reappear around $74,000 and $71,000. Long-term conviction buying is estimated to have occurred at these levels, with approximately 49,000 BTC and 41,000 BTC respectively.

Image From X: Glassnode

$95,000 Cost Basis Cluster Grows As Demand Moderates

While support levels continue their gradual climb, resistance seems to be strengthening around the $95,000 level. Investor cost basis data indicates a build-up of 12,000 BTC clustered at this price point since March 24th.

This suggests that some investors are now seeing $95,000 as a potential market top, and therefore selling pressure could increase as prices approach this zone. This resistance, combined with the support levels we’ve discussed, could mean Bitcoin’s price movement becomes confined to a tighter range in the near future.

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Glassnode data confirms that long-term holders (those holding Bitcoin for over 150 days) have been the primary group taking profits for some time now. Interestingly, the profit-taking from long-term holders is now nearly balanced out by the losses being experienced by short-term traders, who have held Bitcoin for less than 155 days.

Image From X: Glassnode

Featured image from Tech Research Online, chart from TradingView