Bitcoin’s recent recovery above $63,000 was an attempt to regain short-term holder (STH) cost basis, but key on-chain indicators show BTC is resting on “sensitive ground,” according to Glassnode analysts.
This recovery, which saw Bitcoin (BTC) rise from a low of $59,850 on October 3 to a 7-day high of $64,444 on October 7, has pushed BTC above the STH cost threshold, which currently sits at $62,500.
But if the market fails to stay above this level, a large group of recent buyers will come under increasing pressure, Glassnode analysts said in an Oct. 8 report.
Bitcoin Short Holder MVRV Indicator. Source: Glassnode
Analyzing the actual market average ($47,000) and active investor price ($52,500) provides an estimate of the average cost basis for active investors within the current cycle.
Glassnode explained that the position of spot prices relative to these two key price levels can be considered areas of interest in distinguishing between macro bull and bear markets.
The report shows that the spot price of BTC traded above these two price levels in 2024.
“This suggests a relatively robust market, which tends to provide demand support during market declines.”
Bitcoin real market averages and prices for active investors. Source: Glassnode
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Glassnode analysts also used the UTXO Realized Price Distribution (URPD) tool to determine the current cost basis for circulating BTC. Analysis shows that spot prices are located within a very large cluster of coins (ranging from $52,000 to $63,000), suggesting that small changes in price can impact the profitability of a significant number of investors.
The chart below shows URPDs within a denser cluster of STH cost bases, with two large supply nodes positioned between the actual market average and active investor prices.
There are also several “air gaps” near these critical price levels where very small amounts of coins have been won, potentially marking points of interest if a sharp downward move occurs.
“This paints a picture of a market that is on a weak footing, with supply likely to be sensitive to the next major market move.”
Bitcoin Entity Reconciliation URPD. Source: Glassnode
According to the report, these on-chain metrics show how sensitive the BTC market is with regard to the cost base of “massive circulating supply,” but this could be tilted in the same direction “in favor of the bulls.”
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