Following a price crash to below $80,000 last week, Bitcoin has experienced some market recovery over the past 48 hours, rising by over 7.5% to trade above $86,000. Amid this market rebound, crypto market expert Ali Martinez has spotted the most critical support level for the premier cryptocurrency at the moment.
Bitcoin Faces ‘Air Gap’ Below $83K – A Breakdown Could Be Brutal
In an X post on Saturday, Martinez shared a puzzling insight on the Bitcoin market. Using the UTXO Realized Price Distribution (URPD) metric partitioned at all-time highs, the analyst has identified $83,440 as the most vital Bitcoin support zone.
Generally, the URPD is an on-chain metric that shows the price levels at which unspent transaction outputs (UTXOs) last moved, thereby measuring how much Bitcoin was transacted at different price levels. Each bar on the URPD chart represents a price range, and the height of the bar indicates the number of BTC transacted at that level.
Therefore, the URPD can be used to identify potential support and resistance levels as it would show if a significant amount of BTC was acquired or sold at a specific price level.
According to Martinez’s analysis, URPD data from Glassnode shows that investors acquired 171,693 BTC (0.87% of total supply) at $83,440.72, converting this price level into a strong support zone. This is because bitcoin bulls are likely to step in and acquire more BTC at this level in any case of a retest.
However, there is a notable air gap between $72,000 – $82,000 with low levels of UTXO recorded in this price range. Thus, a decisive fall below $83,440 will result in a further price decline due to the lack of demand in the immediate lower price ranges.
Bitcoin RSI Backs Rebound Quest – More Gains Ahead?
In another analysis post on the BTC market, Martinez has hinted at the potential for further price gains amidst the ongoing price recovery. According to the crypto expert, Bitcoin has historically recorded a price rebound after its Relative Strength Index( RSI) went below 30.
The RSI measures the momentum of price movements and determines if an asset is overbought (above 70) or oversold (below 30). Martinez states that Bitcoin’s RSI has recently touched 24 in the oversold zone suggesting a rebound to reclaim previous high price levels may occur according to historical data.
At press time, Bitcoin trades at $86,383 after rising by 2.32% in the past 24 hours. Following the price correction in the past week, BTC remains at 21.02% off from its all-time at $109,114.
Featured image from iStock, chart from Tradingview
