The Bitcoin price put in one of its strongest performances in recent times over the past week, rallying to above the $88,000 level early on. However, the premier cryptocurrency experienced a steep correction on Friday, March 28, following the latest February core inflation data.
With the price of BTC now hovering beneath $84,000, panic seems to be growing in the market as investors fear further correction for the world’s largest cryptocurrency. Interestingly, the latest on-chain data show the critical support levels for the Bitcoin price.
In a recent post on the X platform, blockchain analytics firm Glassnode explained the recent investor behavior and how it could impact the Bitcoin price action over the next few days. This evaluation is based on the cost basis distribution data of investors around the Bitcoin price.
According to Glassnode, the cost basis distribution data reflects the total Bitcoin supply held by addresses with an average cost basis within specific price buckets. As observed in the chart below, the heat map (color intensity) represents the magnitude of BTC supply in a price zone.
Source: @glassnode on XGlassnode data shows that a significant percentage of traders purchased roughly 15,000 BTC at the $78,000 level on March 10 before selling at the recent $87,000 local top. Following this latest round of redistribution, the BTC supply at the $78,000 level is now thin, weakening the support cushion.
It is worth noting, though, that the next crucial support levels lie around $84,100, $82,090, and $80,920, where investors purchased 40,000 BTC, 50,000 BTC, and 20,000 BTC, respectively. However, the Bitcoin price could be at risk of a deep correction if it loses these levels.
In case of a deeper correction, $78,000 might not offer a strong enough cushion for the flagship cryptocurrency following the recent sell-off by investors previously holding at the level. Glassnode data shows that the Bitcoin price could fall to as low as $74,000, the next significant support level after $80,000.
The on-chain analytics platform highlighted $74,000 (where investors bought 49,000 BTC) and $71,000 (where investors bought 41,000 BTC) as the next support levels should the Bitcoin price fall beneath $80,000. “These levels reflect conviction-driven accumulation zones that could absorb additional downside pressure,” Glassnode added.
As of this writing, the price of Bitcoin stands at around $83,800, reflecting an almost 4% decline in the past 24 hours.
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