Blockchain data shows why Bitcoin is stuck at $50,000

Bitcoin USD

Resistance. Bitcoin is well and truly stuck below $50,000. It ended the first week of March with a market reset after the epic plunge of 21% the week prior. Not much fanfare for now, it seems.

There is a reason for that, and it’s hidden away in the blockchain.

With signs that the global economic recovery might come faster than previously expected, traders are keen on speculating how the rebound will benefit Bitcoin. Investors in particular want to know what this might mean for the largest cryptocurrency.

And the answer may be in the trading volume from the eight US focused exchanges that CoinDesk tracks. Action has been flat over the past week, roughly a third of the levels seen recently.

This $50,000 level appears to be a key short-term resistance level, if we go by a blockchain data metric called In/out of the money around price (IOMAP).

Bitcoin IOMAP

An analysis conducted by IntoTheBlock provides this intelligence:

“A large cluster of addresses (1.46 million) and volume (650,970 BTC) had been bought slightly below $50,000. This price range, which already saw high levels of trading activity, is expected to act as strong resistance short-term as investors in this price range may look to break-even on their positions at this point.”

At the same time, another large clusters of addresses and volume are likely to provide strong support, as these have been brought in at a range of $45,600 to $47,000.

Ultimately, a break past $45,000 may mean Bitcoin will trace further, while it will be out the waters with a breakout past $50,000. This is when it could be poised to reach new highs, and will signal the certainty of the correction being over or not.


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