Bitcoin (BTC) Price Plunges: Here's the Nearest On-Chain Support Level the Asset Would Retest if the Drawdown Elongates

Bitcoin (BTC) price has observed a plunge during the past day. Here's the nearest on-chain level that the asset would end up retesting if the drawdown elongates.

Bitcoin has seen a downturn over the past day, and here’s the closest on-chain level that the asset might end up retesting if the drawdown continues.

1 Week To 1 Month Bitcoin Holders Have Their Realized Price At $97,900

As highlighted by CryptoQuant author Axel Adler Jr in a recent post on X, the Realized Price of the 1-week to 1-month-old BTC holders is the closest support for the asset at the moment.

Related Reading: Bitcoin Crashes: Here’s Where The Nearest On-Chain Support Is

The “Realized Price” in this context refers to an on-chain metric that, simply put, tracks the cost basis or acquisition price of the average holder in the Bitcoin network.

When the metric’s value is lower than the spot price of the crypto, it implies that the investors on the whole can be assumed to be sitting on a net amount of profit. On the other hand, it being above the BTC price suggests the prevalence of loss in the market.

In the context of the current topic, the Realized Price of only a specific group of the cohort is relevant: the 1-week to 1-month-old holders. This cohort includes the addresses that have been holding their coins for at least one week and, at most, one month.

Now, here is the chart shared by the analyst that shows how the Realized Price of this Bitcoin group has changed over the past year:

As you can see in the above graph, the Realized Price of the 1-week to 1-month-old Bitcoin holders has been climbing up together with the price rally. This is naturally because the cohort’s cost basis keeps getting repriced to higher levels as new investors buy at the rally highs.

Currently, the indicator’s value is at $97,900, hence, these investors would be in profit at the current price. Earlier in the past day, however, the asset came very close to retesting the level as its price saw a brief dip below $99,000.

The 1 week to 1 month old investors form a part of a larger cohort that’s known as the short-term holders (STHs). The STHs are broadly defined as the holders that bought their coins within the past 155 days.

Statistically, the longer an investor holds onto their coins, the less likely they become to sell. Hence, the STHs, and especially the 1-week to 1-month-old segment, would contain the holders with the least amount of conviction in the cohort, due to their low holding period.

Because of how skittish they are, the STHs usually show some kind of response whenever their average cost basis gets retested by the Bitcoin price. This response may come in the form of buying when the retest occurs from above, as these holders might believe the decline to be just a ‘dip.’

As such, the Realized Price of the 1-week to 1-month-old STHs, which is below the current price, could be viewed as a support level for the crypto. The level has also already helped the asset out once this month.

Related Reading: Ethereum On-Chain Demand Should Sustain ETH Above $4,000, IntoTheBlock Says

So far, Bitcoin has been making a recovery from the plummet, but should the bearish momentum return, the retest of the line may be to watch for, considering the past pattern.

BTC Price

At the time of writing, Bitcoin is trading at around $102,200, down nearly 3% in the last 24 hours.