With the Bitcoin (BTC) sell-off gaining momentum, market analysts are pinpointing three essential price support levels that will be pivotal for the cryptocurrency's short-term direction.
The first crucial level is $112,000, as identified by Swissblock Technologies. The firm stated on X that maintaining this level, along with a stable Risk Index, is key for BTC to regain its strength.
Swissblock's proprietary Bitcoin Risk Index, which combines on-chain valuation and cost-basis metrics to assess market volatility, showed a reading near zero on Monday. This indicates underlying market optimism, even as BTC's price decreased by 1.7% to $112,600 over 24 hours, with a brief dip to $111,717.
The second vital support is $110,000, described by the firm as a "lifeline." Historical data from December-January shows this level was a significant challenge for buyers to sustain, making it a critical area to watch.
The third major support is the "short-term holder cost basis," an on-chain metric currently at $111,400. According to Glassnode, this represents the average acquisition price for wallets holding BTC for 155 days or less. This level often acts as a line between bullish and bearish sentiment; prices above it suggest bullish control, while prolonged trading below could indicate a risk of further sell-offs and a potential shift to a bearish structure.
In summary, the cluster of supports at $110,000, $111,400, and $112,000 forms a delicate zone that traders are monitoring closely as Bitcoin experiences heightened volatility.