On-chain Metrics Explain Why Bitcoin is Holding Firm Between $96K and $98K Without Crashing to $90K
Glassnodes on-chain metrics explain why Bitcoin is holding steady between $96K and $98K despite fears of a potential decline to $90K.In a recent tweet, Glassnode emphasized the advantages of its Cost-Basis Distribution (CBD) model over traditional technical indicators when analyzing Bitcoins price behavior. While conventional tools like moving averages track broad market trends, the CBD model offers a more precise view of investor actions by quantifying Bitcoins supply at specific price levels.Bitcoin Finds Strong Support Between $96K and $98KTraditional indicators like the 7-day Simple Moving Average (SMA) offer a general sense of market direction but often miss crucial price-specific details. For example, while the 7-day SMA is currently near $98,180, Glassnode points out that CBD data reveals 120,000 BTC were accumulated in the $96K to $98K range.This robust accumulation highlights why this zone has become a stronger support level for Bitcoin. For context, Bitcoin recently experienced a flash crash to $94,300 but rebounded almost immediately back into the $97K range. Since then, the price has generally stayed between $96,000 and $98,000 for most of today.Liquidity Gaps and Volatility RisksThe CBD model also helps identify liquidity gaps, which are essential for understanding potential price volatility. Glassnodes 3-month view shows that Bitcoins supply below $96K is increasingly thinning, with a critical support level emerging around $87K.As a result, the firm warns that if Bitcoins price drops below $96K, short-term price instability could rise sharply due to the lack of liquidity to absorb selling pressure.This observation is further supported by data from IntoTheBlock which shows that Bitcoin is currently supported by 1.44 million addresses holding 1.47 million BTC, with an average purchase price of $97K.
Text source: The Crypto Basic
