Glassnode, an analytics firm specializing in blockchain data, has identified a key zone for Bitcoin’s price that could be pivotal for those looking to see a bullish trend prevail. In their latest report, the focus was on Bitcoin’s investor cost basis, examined through several lenses.
Multiple Bitcoin Indicators Highlight a Critical Price Zone
Glassnode’s report starts with the "UTXO Realized Price Distribution" (URPD). Essentially, this metric lays out how Bitcoin’s supply is spread across various price levels from the value of the last transaction.
Examining the Metric Before the Recent Downturn:
Before Bitcoin’s recent price pullback, the distribution chart revealed few coins purchased between $70,000 and $92,000. In the world of on-chain analysis, understanding an investor’s cost basis is crucial because it influences when investors might act to either secure gains or mitigate losses. Given that a minimal portion of the supply was bought in this range, it created what can be likened to an "air-gap" of potential demand.
When the crash happened, Bitcoin easily slipped into this gap. But the bulls showed resilience, stepping in to purchase during this lull and thus altering the URPD.
Investors have reportedly acquired 150,000 BTC in this air-gap space, helping to fortify it against future downturns. Still, compared to other cost basis zones, this region remains relatively sparse.
Another part of the analysis focuses on the Realized Price for short-term holders. Realized Price, a concept also found in the URPD, marks the average entry price across a segment of Bitcoin users.
Current Trends for Short-Term Holders (STHs):
Here’s where things stand for STHs, a group defined by their purchases within the last 155 days. According to Glassnode, the short-term holder cost basis has typically been a valuable benchmark during bull market trends. They’ve mapped out the average cost basis with bands that signify one standard deviation above and below.
Presently, the lower band—a level one standard deviation below the STH Realized Price—sits at $71,000. This coincides closely with the end of the earlier mentioned air-gap.
This price level isn’t unique to the STH metric. It also appears in the chart for the Active Realized Price indicator.
The Active Realized Price calculates the realized value of the entire Bitcoin network with a particular focus on what Glassnode considers the ‘economical’ supply, excluding coins that are unlikely to move back into circulation.
Right now, this metric also points to about $70,000, aligning with both prior indicators. Given this convergence of key cost metrics, Glassnode suggests this area may represent a significant defensive threshold for bulls should prices slump drastically.
Current Bitcoin Price
As of now, Bitcoin is valued around $90,000, marking an approximate 5% rise over the past week.
The recent trading data indicates a positive trajectory, with prices climbing in recent days, as visualized in a TradingView chart.
Featured imagery sourced from Dall-E, and charts from Glassnode.com and TradingView.com.
