While Bitcoin (BTC) price support may be psychological to some traders, the stats behind BTC remaining above $20,000 for a week are strong indicators of price support or in other words, a new price floor. bear market. Multiple Bitcoin data points could set a support level at $20,000.
Last week Bitcoin reached a high of $20,961. Nevertheless, never maintained its upside momentum as the rally fizzled out, failing to break $21,000 support. As a result of the rally as well as the rejection, Glassnode, in the most recent report, looks at whether Bitcoin is carving out a bear market bottom.
Realized price distribution
Bitcoin Realized Price Charts Average Cost Buyers Paid for Their BTC Holdings. If the price of Bitcoin falls below a user’s realized price, the user is technically experiencing an unrealized loss. For visual effect, the realized price distribution of UTXO shows the percentage of supply distributed in the acquisition price.
The 2019 bear market shows that 30% of the total supply of BTC was concentrated within the realized price range. In April 2019, the price broke above the realized price, signaling the start of a new bull market.
Observing the current market and applying the same methodology, the realized price of Bitcoin is concentrating 20% of the offer between USD 17,000 and USD 22,000. Although this suggests that further redistribution may be required, the consolidation is significant and highlights a resilient holder base.
How long until the breakup?
Bitcoin’s valuation model may indicate how long until a breakout like the one in April 2019. Based on historical data, previous cycles have witnessed the realized price range lasting between 5.5 and 10 months. In the current cycle, Bitcoin has only been range bound for ~3 months, which means the next breakout may only come after more months of sideways trading.
Long-term holders continue to make profits
Using the realized price distribution in terms of long-term holders versus short-term holders can also provide information. Currently, long-term holders are the majority of the bid in profit meaning they have less stress to sell and if they did, they are in profit. The total amount of the offer with benefits is 56%, while the long-term holders are at 60%.
Although previous market cycles have lasted longer than the current one, the signs are positive for a repeat breakout. And with long-term holders making up an overwhelming majority of the profit offering, selling pressure can be minimized in the event of upcoming sell-off events.
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