Bitcoin‘s (CRYPTO: BTC) struggle to breach $60,000 has proved that the price is a crucial resistance level in the current bull run.
What Happened: However, the cryptocurrency has also found strong support at $50,000 and an even stronger price floor at $40,000, according to research from Chainalysis. According to the firm’s chief economist, Philip Gradwell, recent data indicates “strong support for high prices.”
Gradwell finds that 3.1 million Bitcoins have been acquired at a cost of more than $40,000 and continue to be held, while 1.6 million Bitcoins have been bought and held at above $50,000.
Buyers reportedly spent $88 billion to acquire the 1.6 million Bitcoin at an average cost of over $50,000, according to Chainalysis data.
“Analysing the cost of acquisition over time demonstrates how radically the market has changed in the last few months, to one where there is likely to be a lot of demand from existing buyers to support high price levels,” said Gradwell.
Why It Matters: For market proponents with a bullish outlook, the digital asset recording higher highs and higher lows on a weekly basis is an optimistic indicator.
An on-chain analyst from Crypto Quant, Ki Young Ju, shared a chart that depicted Bitcoin miners accumulating despite the hash rate on the network hitting an all-time high.
— Ki Young Ju 주기영 (@ki_young_ju) April 6, 2021
“Network fundamentals are getting stronger, and those who make the network strong don’t cash out Bitcoins to buy new mining rigs. They buy mining rigs with cash, not Bitcoin,” he said.
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