Bitcoin Has Formed a ‘Firm Foundation’ Under $30,000: Glassnode

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According to on-chain analytics platform Glassnode, Bitcoin’s supply distribution shows a strong base of investor holdings below $30,000, suggesting strong price support for its current level.

In a report on Monday, the company noted how the profit/loss ratio of coins reached 75:25, meaning that only a quarter of all coins were bought above the current Bitcoin price of around $30,000.

Virtually all members of this cohort are long-term holders who are either battle-hardened HODLers or likely to create resistance by taking profits as the price rises, the company explained.

We can see that the supply cluster between $15,000 and $30,000 is quite large, demonstrating that a large volume of coins have changed hands over the past 12 months, Glassnode noted. Conversely, only 25% of supply was acquired at prices above $30,000, held by buyers in the 2021-22 cycle.

Bitcoin: Profit Supply Percentage. Source: Glassnode.

For Bitcoin, the 75:25 ratio represents a break-even point where 50% of all trading days saw a higher profit/loss balance, and vice versa. According to Glassnode, the market typically takes time to digest this level once it is hit, with analysts calling this time the accumulation period between events by half.

Accumulation periods, Glassnode explained, are characterized by a lack of macro guidance and sideways but volatile trading for several months. With the market having returned to this equilibrium point, it remains to be seen whether an equally long and jerky process is required to overcome it, the report reads.

Glassnode has previously pointed out that the current behavior of Bitcoin mimics that of early-stage bull markets. Coins see continued wealth transfer from investors with high time preferences to HODLers, while small BTC holders (<1 BTC) stack coins higher than they have since the peak of the 2017 cycle.

Mining companies like CleanSpark and Iris Energy have made a strategic point of buying up infrastructure to mine as many coins as possible in the coming months.

British multinational bank Standard Chartered, meanwhile, estimates that if miners start hoarding their coins next year, the supply crunch could push the price of Bitcoins to $120,000 by 2025.

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