A report from the on-chain analytics firm Glassnode has revealed a Bitcoin price region that could prove to be crucial for the bulls.
Several Key Bitcoin Metrics Are Pointing At The Same Price Range Right Now
In its latest weekly report, Glassnode has discussed the Bitcoin investor cost basis from various angles. The first indicator that the analytics firm has shared is the “UTXO Realized Price Distribution” (URPD), that basically tells us about how the BTC supply is distributed among the different price levels based on the last transaction value.
First, here is how this metric looked before the recent price crash:
As is visible in the chart, very few coins had their cost basis between $70,000 and $92,000 before the crash. In on-chain analysis, investor cost basis is considered an important topic, as holders are more likely to make some kind of move when their profit-loss status is threatened. Since this range contained the acquisition level of only a small part of the supply, it was sort of an “air-gap” in terms of potential demand.
This may be why BTC easily slipped deep into this region when the crash came. So far, though, the bulls have come through in providing support, as they have since participated in some buying in this vacant region, changing the URPD.
Thus, the range is now better set up to provide support than before, although it’s still sort of an empty region when compared to the other Bitcoin cost basis centers.
The second indicator that Glassnode has talked about is the Realized Price of the short-term holders. The “Realized Price” is a term that was also in the full form of URPD. What this metric measures is the cost basis of the average investor belonging to a part of the BTC userbase.
Below is a chart that shows the trend in the indicator for the short-term holders (STHs), who are the Bitcoin investors who purchased their coins within the past 155 days.
“The Short-Term Holder cost basis has historically acted as an important reference level across bull-market uptrends,” notes the analytics firm. “We have calculated the ±1σ bands of the Short-Term Holder Cost-Basis, which have typically acted as a sort of upper and lower bound for local price action.”
Interestingly, this lower bound, that is, the level one standard deviation below the STH Realized Price, is situated at $71,000 right now. This is about the same level as where the previously mentioned air-gap area ends.
This isn’t the only other place where this level shows up, as the chart for the Active Realized Price shows.
The “Active Realized Price” basically takes the Realized Price of the entire BTC network, with an added twist. The metric only includes the ‘economical’ supply, meaning that it excludes for the part of the supply that Glassnode has determined to be unlikely to return back into circulation.
At present, the Active Realized Price stands at $70,000, which is once again nearly the same level as the one from the other two indicators. “With significant confluence across several key cost basis metrics, this price region becomes an area of interest, perhaps being the final defence line for the bulls in the event of a complete capitulation,” concludes the report.
BTC Price
At the time of writing, Bitcoin is trading around $90,000, up almost 5% in the last week.
Featured image from Dall-E, Glassnode.com, chart from TradingView.com
Keshav Verma
Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.
Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.
In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.
Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.
Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..
Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.
Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.
As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.
Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.
Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.
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