According to data provided by IntoTheBlock, Bitcoin’s rally above $47,000 suggests that it may be difficult to continue the uptrend as there are at least two major resistance points ahead. So, going over $47,000 does not guarantee a $50,000 journey.
Upcoming Bitcoin Resistances
As the In/Out of the Money Around Price (IOMAP) indicator developed by IntoTheBlock reveals, Bitcoin is currently consolidating at a major resistance that has prevented the cryptocurrency from breaking past the $48,270 resistance point.
The next resistance before $50,000 will be the range starting at $49,620, where around 1.5 million addresses opened their positions. The mentioned range is significantly smaller compared to the $47,796-$49,211 resistance zone with a total volume of 1.16 million BTC. The first resistance point remains significantly larger compared to the nearest support ending at $46,312 according to the indicator.
IOMAP Indicator
While the indicator itself cannot be used to identify exact resistance or support points, information about the concentration of funds around a particular price can give a clue as to the potential for the asset’s rate of movement.
The path ahead for $BTC
using @intotheblock IOMAP we can identify key price levels of buying and selling activity in the short-term.
The key level of resistance is located around $48,479, where 2.38m addresses are holding 1.16m BTC. Passing that level could led BTC towards 50k pic.twitter.com/PchbSEQ2Hb
— IntoTheBlock (@intotheblock) March 28, 2022
According to this indicator, the average price, that is, the cost, at which cryptocurrencies were purchased is determined and compared with the current price. If the Current Price is greater than the average cost, this address is set as “In”, that is, “in profit”. If the current price is less than the average cost, the address is defined as “Out”, that is, “at a loss”.
The predictions that traders make using the indicator are based on the psychology of the holders; Traders who are at a loss for a long time tend to sell or dispose of their holdings at the entry point to avoid loss if the asset is withdrawn for any reason.
In the example given, the $47,796-$49,211 range contains 2.4 million addresses that opened positions worth about 1.2 million BTC; This means that some of the funds concentrated in the range could be sold as the leading cryptocurrency enters the region.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, KoinFinans and the author of this content cannot be held responsible for personal investment decisions.