Altcoins Talks - Cryptocurrency Forum
Cryptocurrency Ecosystem => Bitcoin Forum => Bitcoin News & Updates => Topic started by: RSRS on July 15, 2021, 08:34:26 PM
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Going through the most significant price pullback in this cycle, approximately 55% from the all-time high set in April, there is considerable uncertainty in the Bitcoin market from technical and on-chain analysts’ perspectives.
Support and Resistance Levels (Bullish)
Similar to Volume Trading Strategy that employs the trading volume on exchanges to indicate the support/resistance levels, UTXO Realized Price Distribution (URPD) is an on-chain metric that can highlight significant support/resistance areas based on transactions that occurred out of exchanges (URPD illustrates prices at which addresses acquired the current set of Bitcoins on the blockchain).
The ultimate merit of using on-chain is that it empowers traders to check if volume data from exchanges is valid. This extra confirmation tool can validate any conclusions about formed resistance/support levels
Here in Figure 05, it is apparent that after the recent market crash and its following consolidation, a strong support level has been established at the $30-31K level.
The critical point to add here is that support/resistance levels extracted from the on-chain profiles act as a magnetic level, and price fluctuation around them at short time frames should not necessarily be translated as eliminating those levels.
Figure 05 shows at which prices the current set of Bitcoin UTXOs were created, i.e., each bar shows the number of existing bitcoins that last moved within that specified price bucket.
Sourch (https://cryptonews.net/en/news/bitcoin/1071397/)