An analyst has explained how $47,360 could be the next target for Bitcoin if the cryptocurrency can clear the $38,500 resistance wall.
Bitcoin URPD Suggests $47,360 Holds Next Major Resistance After $38,500
In a new post on X, analyst Ali talked about what the levels ahead of BTC are looking like right now in terms of the on-chain resistance. The indicator of interest here is the “UTXO Realized Price Distribution” (URPD), which tells us about the amount of coins (or more precisely, the UTXOs) that were last acquired at the various levels that the cryptocurrency has visited in its history.
Generally, the levels that host the cost basis of a significant number of investors can be important levels for Bitcoin, due to how investor psychology tends to work.
To any holder, their acquisition price is naturally a level that’s important, so whenever the price retests that point, they may become more prone to make some sort of move. How they may react to the retest may depend on what their profitability status was prior to the retest.
An investor who was in profits before might want to take a further gamble and buy more, as they may think that the price would go up again in the near term. On the other hand, a holder who was in losses might just want to exit at their acquisition price, just so they can at least avoid going into losses again in the future.
Such buying or selling that arises out of these retests can provide support or resistance to the asset’s price. As mentioned before, though, only levels with a large number of investors are really of any relevance to BTC, as just a few users making these buy or sell moves won’t tick the price meaningfully.
The below chart shows the data for the Bitcoin URPD, to see where the major centers of holder cost basis lie.
Looks like the the level just ahead hosts the cost basis of a significant amount of UTXOs | Source: @ali_charts on X
As displayed in the above graph, the $37,000 level holds the cost basis of a large number of UTXOs, suggesting that the mark should prove to be a strong support wall for the cryptocurrency.
This is certainly an optimistic sign for the rally, as it means that BTC might be able to hold itself above this level without too much effort and work at building an upward move.
The next level that might pose any major resistance could be $38,500, but if Bitcoin can successfully clear this wall, the levels ahead are relatively thin with investors.
From the chart, it’s visible that above $47,000 is where the next resistance boundary lies. So Ali thinks that if a break above $38,500 happens, BTC could advance toward this level.
BTC Price
Bitcoin has slumped back toward the $37,000 level, but if the on-chain data explained earlier is anything to refer to, the asset should find support here.
BTC had broken above $38,000 recently | Source: BTCUSD on TradingView
Featured image from Shutterstock.com, charts from TradingView.com, Glassnode.com