A crucial demand zone has been identified by on-chain analytics company IntoTheBlock as a potential area of support for Bitcoin (BTC) during its current dips.
As of writing, the biggest digital currency, Bitcoin, was trading at $63,562, having dropped as much as 10% on Tuesday. Larger coins like Solana, Ethereum, and canine-themed coins like Dogecoin and Shiba Inu were also losing money.
The largest withdrawal from the $25 billion Grayscale Bitcoin Trust, or GBTC, since it converted to an ETF on January 11 was $643 million on Monday, as reported by Bloomberg. Previously, a wave of GBTC departures was more than offset by strong demand for nine new spot-Bitcoin ETFs that debuted simultaneously.
But money flowing into products from industry titans like Fidelity Investments and BlackRock Inc. is also decreasing; on March 18, there was a net outflow of $154 million from the batch of 10 ETFs.
After hitting an all-time high of $73,835 on March 15, bitcoin has been progressively dropping, with five of the last six days showing a negative value. Bitcoin fell as low as $62,428 during today’s early trading session before somewhat rising.
Where will Bitcoin find support?
As Bitcoin continues to decline, IntoTheBlock queries where Bitcoin will get assistance. IntoTheBlock responds to this by pointing out that the $61,000 range may be an important region to monitor. This is due to the fact that at this point, 805,000 addresses had bought over 466,000 BTC, suggesting a solid hunger for BTC at that price.
Given the significant amount of BTC bought in this demand zone, it’s possible that major or institutional investors believe the price of Bitcoin is now low and appealing for accumulation. Given that increasing demand frequently results in upward price momentum, such accumulation may offer a strong foundation for a price recovery.
https://x.com/intotheblock/status/1770025171040027007?s=20
Whether Bitcoin’s drop can be stopped by this critical demand zone is still the fundamental question. Strong buys in demand zones have historically resulted in price stabilisation and even rallies; it is unclear if this situation will have the same potential.
