The lead research analyst at Glassnode has highlighted how the Bitcoin supply clustered at the top levels might have to shift down before a sustained recovery can take shape.
Bitcoin Cost Basis Distribution Shows Massive Supply Above $80,000As is visible in the graph, there is a decent amount of Bitcoin supply that was purchased at recent price levels. This supply cluster has built up as the asset has consolidated in the region since February.
While this cluster isn’t small, it’s still less dense than some other zones. From the chart, it’s apparent that there are regions above $80,000 that host the break-even level of an extreme amount of supply approaching the 495,000 BTC mark.
Generally, underwater investors act as an impediment to price surges as they sell near their break-even. This effect could in part be what capped out the recovery rally in May. CryptoVizArt explained:
For a sustained recovery to take shape, this supply needs to gradually migrate into new buyers’ hands at lower cost basis levels. As that wall softens, the overhang pressure eases and demand has room to build conviction.
In the past, the process has often taken some time to occur for Bitcoin. “This transition can be achieved through deeper correction and/or bear market continuation,” said the Glassnode researcher.
It now remains to be seen how the CBD will develop for Bitcoin in the near future, particularly in terms of whether the top buyers finally capitulate to new investors.
BTC PriceBitcoin plummeted to $59,000 last week, but the asset opened on Monday with some recovery as its price is now floating around $63,200.
