On-chain analytics firm IntoTheBlock has pointed out a key demand zone where Bitcoin (BTC) might find support amid its current declines.
The largest digital asset, Bitcoin, fell as much as 10% on Tuesday, trading around $63,562 at the time of writing. Other big coins, like Ethereum, Solana and dog-themed cryptocurrencies such as Shiba Inu and Dogecoin were also experiencing losses.
The $25 billion Grayscale Bitcoin Trust, or GBTC, experienced a $643 million outflow on Monday, the most since it transitioned into an ETF on January 11, according to Bloomberg. Previously, robust demand for nine new spot-Bitcoin ETFs that launched at the same time more than compensated for a wave of GBTC exits.
However, flows into products from heavyweights like Fidelity Investments and BlackRock Inc. are also slowing, with the batch of 10 ETFs as a whole seeing a net outflow of $154 million on March 18.
Bitcoin has been steadily declining after reaching all-time highs of $73,835 on March 15, with five out of six days in red. BTC reached lows of $62,428 in the early trading session today before slightly rebounding.
Where will Bitcoin find support?
As BTC's slide continues, IntoTheBlock asks where BTC will find support. In an answer to this, IntoTheBlock highlights that the $61,000 range might be a key area to keep an eye on. This is because 805,000 addresses have acquired over 466,000 BTC at this level, indicating a healthy appetite for BTC around that level.
The significant volume of BTC purchased within this demand zone suggests that institutional investors or large players may perceive Bitcoin's current price as undervalued or attractive for accumulation. Such accumulation could potentially provide a solid basis for a price rebound since higher demand often leads to upward price momentum.
The key question remains whether this key demand zone might halt Bitcoin's decline. Historically, demand zones with strong buys have led to price stabilization and even rallies; such potential in this scenario, however, remains unknown.