On-chain analytics provider, Glassnode, has revealed that there is solid support at the $47,000 level for Bitcoin. It came to this conclusion in its latest ‘Week on Chain’ report using analysis from chart guru Willy Woo and data scientist Rafael Schultze-Kraft (@n3ocortex).
It added that Woo noted a significant volume of BTC was transacted on-chain around $45,000, forming an on-chain support level late last week.
Schultze-Kraft highlighted that this support level has actually strengthened to rest above $46.6k, with 1.2 million BTC, or 6.5% of circulating supply, transacting in this zone.
#Bitcoin has held composure around $50k this week despite volatility in traditional markets.
This Week On-chain, we deep dive into how three key network participants managed this correction.
– Long Term Holders
– Short Term Holders
— glassnode (@glassnode) March 8, 2021
Is BTC Accumulation Increasing?
Glassnode pointed out that the patterns suggest an increase in accumulation interest at these levels:
“When a large volume of coins move on-chain and an on-chain support level holds, it suggests that there is significant accumulation interest and buyers see it as a ‘value’ entry point.”
However, it also noted that should price fall below this support level, it would become a level where overhead supply may form equally strong resistance.
Using the UTXO Realized Price Distribution metric, which shows which prices the current set of Bitcoin unspent transaction outputs were created, the on-chain support level at $47k is the largest since prices were $11k, it added.
“This range now represents one of the largest on-chain BTC accumulation levels in history, certainly the largest since the last cycle’s $20k ATH was breached.”
The balance of Bitcoin on exchanges also continues to decline which could indicate readying to sell or hodling in cold wallets. The report added that throughout February the rate of miner sales was declining, whereas today, it is almost net neutral meaning that miners could be accumulating also.
Bitcoin Price Update
At the time of press, Bitcoin was changing hands for $54,150 according to Tradingview which has reported a 24 hour gain of almost 7%.
It is the highest the asset has traded since Feb. 22 when it was falling back from the all-time high of $58,250 the previous day. Bitcoin is currently facing resistance here and needs to break above $55,900 to make a move towards a new ATH.
On the downside, support can be found in the $48,000 region however BTC is currently in the process of forming its fifth green candle in a row so the bulls are running the show at the moment.