Recent on-chain data indicates that Bitcoin has been trading within a significant cost-basis cluster, although a recent price surge failed to push it past the established range. Analyst Ali Martinez shared insights on the UTXO Realized Price Distribution (URPD) of Bitcoin, an indicator that reveals the price levels at which various amounts of Bitcoin were last purchased.
The URPD data indicates that a considerable quantity of Bitcoin supply was acquired near the current price levels, which stands at approximately $72,400. According to the analysis, the current supply zone sits between $63,100 and $73,200, suggesting that a number of investors with coins purchased below the latest price are now profitable, while those who bought above this range might be operating at a loss.
The recent upward movement in Bitcoin’s price seemed to place many investors in a favorable position, with the price climbing toward the upper end of the identified cost-basis cluster. However, it has not yet been able to break free from this trading range. The analysis points out that investors often react to revisits of their cost basis by selling, driven by a fear of returning to a loss. Conversely, those who find themselves in profit may choose to accumulate further at their cost basis to bolster their position.
Martinez emphasized the significance of the cluster between $63,100 and $73,200, noting that this range represents areas where “millions of holders voted” on the price. As long as Bitcoin continues to trade within this corridor, these investors are likely to feel psychologically compelled to defend their investment.
Interestingly, there is limited supply on the URPD beyond this range up until the $82,000 mark. This observation implies that while Bitcoin might face weak support at higher levels, the resistance from investors looking to exit at their cost basis could also be minimal. The market dynamics will be monitored closely in the coming days to see if Bitcoin can break out of this range.
In a related discussion, Martinez also analyzed Ethereum’s URPD, revealing substantial clusters of buying activity around the price points of $2,079 and $1,882. Currently, Ethereum is trading above these levels, indicating that if it were to drop below them, numerous holders from the $1,584, $1,238, and $1,089 levels are expected to defend their original buy-in prices, potentially creating a new price floor.
As it stands, Bitcoin’s price recovery appears to have stalled since Tuesday, lingering at around $72,400, leaving market participants to speculate on the next moves for both Bitcoin and Ethereum as they navigate these critical support and resistance levels.
