As Bitcoin’s recent sell-off gains momentum, the spotlight is now on three critical price support levels that could determine the cryptocurrency’s short-term path. Analysts and traders alike are zeroing in on these thresholds, each serving as a potential pivot point in the ongoing market drama.
The $112,000 Threshold: A Pillar of Stability?
Swissblock Technologies has identified $112,000 as a crucial line in the sand for Bitcoin. This level isn’t just a random figure; it’s a calculated benchmark derived from their Bitcoin Risk Index, which combines on-chain valuation and cost-basis data to assess market volatility. In simple terms, when the index stays low or stable, it suggests that investors are feeling optimistic. However, any uptick in the index might indicate looming price swings and increased risk aversion.
On Monday, the Bitcoin Risk Index was near zero, a surprising note of optimism even as Bitcoin dipped by 1.7% to $112,600 within the past 24 hours. Prices even slipped momentarily to $111,717, according to CoinDesk data. Despite the volatility, the near-zero index reading hints that investors might not be as skittish as the price action suggests. Swissblock remains hopeful that as long as $112,000 holds, Bitcoin could muster the strength to rebound and forge ahead.
$110,000: The Historical Lifeline
Next up is the $110,000 mark, which Swissblock describes as a “lifeline support.” This level holds historical significance, acting as a battleground in the past. Data from the December-January period show that buyers struggled to sustain Bitcoin above this level, marking it as a crucial zone for traders to watch. Should Bitcoin slip below this threshold again, it might not only erode investor confidence but also invite further selling pressure.
In the ever-evolving world of cryptocurrencies, historical data often serves as a guide, providing insights into potential future price movements. The $110,000 level has previously tested the mettle of Bitcoin bulls, and its ability to do so again could either reinforce or undermine market sentiment.
The Short-Term Holder Cost Basis: A Bull-Bear Battleground
Finally, we have the on-chain metric known as the “short-term holder cost basis,” currently pegged at $111,400. This figure, as defined by analytics firm Glassnode, represents the average purchase price for wallets that have acquired Bitcoin within the last 155 days. Why does this matter? Because it serves as a battleground between bulls and bears.
When Bitcoin trades above this level, it generally indicates bullish conviction. In contrast, sustained trading below could be a harbinger of increased sell-offs or a shift toward a bearish market structure. “Sustained trading below this level could signal a shift toward a mid- to long-term bearish market structure,” Glassnode explained on social media platform X.
Navigating the Volatility Maze
Together, these three levels – $110,000, $111,400, and $112,000 – form a delicate support zone that traders are watching with bated breath. As the market navigates this volatile phase, the interplay between these thresholds will likely serve as a roadmap for Bitcoin’s near-term trajectory.
For traders, the current situation poses both opportunities and risks. Successfully defending these support levels could inspire renewed bullish momentum, potentially propelling Bitcoin toward new highs. However, if these floors give way, it may trigger a cascade of selling pressure, leading to further declines.
A Balanced Perspective
It’s important to consider both sides of the coin. While the potential for a bearish downturn exists, the cryptocurrency market is notoriously unpredictable. Factors such as regulatory developments, macroeconomic shifts, and technological advancements could all influence Bitcoin’s path forward.
Moreover, the resilience of Bitcoin should not be underestimated. Despite numerous challenges over the years, the digital currency has repeatedly bounced back, often stronger than before. As traders and investors keep a close watch on these critical support levels, it’s clear that the coming days and weeks will be pivotal in shaping Bitcoin’s future.
In conclusion, Bitcoin’s current price action underscores the importance of these three key support levels. Whether they hold or falter will likely determine the cryptocurrency’s short-term direction. As always, market participants should exercise caution, stay informed, and be prepared for any outcome. The world of Bitcoin is nothing if not full of surprises, and it seems the next chapter is just beginning.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
