Bitcoin Price Dips Below $84,000: Analyzing Key Support Levels

After a strong rally above $88,000 last week, Bitcoin (BTC) experienced a significant correction on Friday, March 28th, following the release of February’s core inflation data. With BTC currently trading below $84,000, market anxiety is rising, fueling concerns about further price drops. However, a closer look at on-chain data reveals crucial support levels that could influence Bitcoin’s trajectory.

Could Bitcoin Plunge to $71,000?

Recent investor behavior, as analyzed by blockchain analytics firm Glassnode, offers insights into potential future price movements. Their analysis utilizes cost basis distribution data, which illustrates the total Bitcoin supply held at various average purchase prices.

Glassnode’s heatmap visualization (see below) reveals the concentration of Bitcoin supply within specific price ranges. The intensity of the color indicates the magnitude of BTC held at those price points. The data suggests a significant number of traders acquired approximately 15,000 BTC around $78,000 on March 10th, subsequently selling near the recent high of $87,000. This redistribution has thinned the support at the $78,000 level.

Nevertheless, key support zones remain. Glassnode identifies notable support at approximately $84,100 (40,000 BTC), $82,090 (50,000 BTC), and $80,920 (20,000 BTC). A breach of these levels could trigger a more substantial correction.

Should the price fall below $80,000, the $78,000 level may not offer robust support due to recent selling pressure. Glassnode projects a potential decline to $74,000 (49,000 BTC accumulated) and even $71,000 (41,000 BTC accumulated) if these key support areas are broken. These levels, according to Glassnode, represent areas of significant previous accumulation that could potentially absorb further downward pressure.

Bitcoin Price Overview

At the time of writing, Bitcoin is trading around $83,800, showing a nearly 4% decrease over the past 24 hours.

Disclaimer: This analysis is based on publicly available data and does not constitute financial advice. Investing in cryptocurrencies involves significant risk.