Bitcoin’s Current State Is Sensitive, Glassnode Explains Why

Data from Glassnode shows that the current bitcoin price is based on the cost of a large number of coins. Here’s what it means.

780,000 BTC was acquired close to current spot prices

According to data from on-chain analytics firm glassnodeIts acquisition price of 4.6% of the entire circulating bitcoin supply is near the current spot prices of the asset.

The relevant indicator here is “unit-adjusted UTXO”. Actual prices Distribution (URPD),” which in simple terms tells us how investors’ cost basis is distributed right now.

value based Here refers to the price at which they bought their coins, so this distribution shows us at what price how many coins were received by the holders.

Note that this indicator is adjusted for entities, meaning that all internal movements between wallets owned by an investor are removed from this data (an “entity” refers to a collection of addresses that identified by Glassnode as belonging to the same holder).

Naturally, this adjustment is made because any movement between addresses of the same entity would otherwise count as a sale. Thus, a new cost basis will be given to the investor (when in fact it is not).

Now, here is a chart that shows how the URPD looks in the bitcoin market right now:

Looks like the levels around the current price have a large amount of coins concentrated | Source: Glassnode on Twitter

As highlighted in the graph above, the level around the current spot price of the cryptocurrency appears to be the largest center of cost basis in the market right now.

In total, 780,000 tokens were bought at these prices, which is approximately 4.6% of the cryptocurrency’s entire circulating supply. For this reason, the price range that Bitcoin is currently trading in could be crucial to where the asset could go from here.

Glassnode explains, “With so much of bitcoin concentrated within a tight price range, a move in either direction would send a significant amount of the coin into a profit or loss position, highlighting the acute sensitivity of our current situation.” does.”

Key cost basis centers have historically played a notable role in the market because they act as important psychological levels. During a bearish trend, investors prefer to sell when prices fall on their cost basis, as they want to avoid losses. Similarly, holders prefer to buy more at their cost basis during bullish trends considering it a profitable buying opportunity.

It remains to be seen how the market will react to the current situation in the coming days.

btc price

At the time of writing, bitcoin is trading around $26,000, down 5% over the past week.

The value of the asset seems to have plunged down during the past day or so | Source: BTCUSD on TradingView

Featured Image from Thought Catalog on Unsplash.com, Chart from TradingView.com, Glassnode.com