Bitcoin's Next Demand Zone Is $56,000: Prepare?

On-chain data reveals the next significant Bitcoin demand zone is $56,000, which BTC may return if the drop continues.

Next Major Bitcoin On-Chain Support Around $56,000

The market intelligence tool IntoTheBlock estimates that BTC may need support around $56,000 because to its recent decline.

On-chain research uses the amount of coins investors last bought at a level to determine support or resistance. A cost-basis distribution chart of cryptocurrency price ranges around the current spot price shown below.

In the graph, the dot size reflects the quantity of Bitcoin bought in the price range. Investors seem to be concentrated around $63,000–$64,890. One million investors bought 530,000 BTC in this area.

Due to the prominence of the level, investors may be more willing to act when the asset retests their cost basis.

Investors who were successful before the retest may now bet more, reasoning that if this level was lucrative before, it may be again.

Naturally, this purchasing influence would only affect the market if many buyers bought coins within a limited price range. The $63,000–$64,890 range fits.

BTC recently fell below the range, signaling that it may have broken down.

The chart from IntoTheBlock shows that $55,200 to $57,100 is the next significant support area. If the present downturn continues, this may be the next important range.

“While this doesn't mean Bitcoin has to go this low, it is good to keep this range in mind while price is exploring recent lows,” the analytics company said. A drop to the average price of this range ($56,000) would reduce the coin's spot value by approximately 10%.

BTC may return another intriguing on-chain level before this one. In an X article, analyst James Van Straten noted that short-term holders' Realized Price (average cost basis) is $58,800.#etf #bitcoinhalving #BullorBear $BTC