Bitcoin Surges 2% In Week, Faces $96,900-$98,700 Resistance

Bitcoin is currently trading within a range that is defined by two significant on-chain demand zones. Analyst Ali Martinez has highlighted these key levels, which are determined by the cost basis of investors. The cost basis is the price at which investors originally acquired their Bitcoin, and it plays a crucial role in how they react to price movements.

When the price of Bitcoin retests its cost basis, investors may react differently based on whether they were in profit or loss before the retest. Those who were in profit might accumulate more, believing the level will be profitable again. Conversely, those who were in loss might sell, fearing further decline. These reactions can significantly impact Bitcoin's price, especially when a large number of investors are involved.

Currently, Bitcoin has broken above a major supply wall in the $93,700 to $96,600 range, which includes the cost basis of 2.13 million addresses holding 1.39 million BTC. The next challenge for Bitcoin is the $96,900 to $98,700 range, which contains the cost basis of 750,800 BTC. Since these investors are holding at a loss, it is possible that Bitcoin may face resistance in breaking through this zone.

The fact that the $93,700 to $96,600 range has turned green could be a positive sign, indicating strong support. This support could cushion any potential drops after rejections. However, if this support fails, the next major support zone is between $82,000 and $85,000. It remains to be seen whether demand will be strong enough to sustain Bitcoin's price recovery.

At the time of writing, Bitcoin is trading around $96,800, up over 2% in the last seven days. The price has surged in the last couple of days, but the future direction will depend on how it navigates these key on-chain demand zones.