Bitcoin’s supply distribution shows a “firm foundation of investor holdings” below $30,000, suggesting strong price support for its current level, according to the on-chain analytics platform Glassnode.
In a report published on Monday, the firm noted how the ratio of coins in profit/loss has reached 75:25, meaning that just one-quarter of all coins were bought above Bitcoin’s current price of about $30,000.
Virtually all members of that cohort are long-term holders who “are either battle-hardened HODLers, or “likely to create resistance” by taking profits as the price rises, the firm explained..
“We can see that the supply cluster between $15K and $30K is quite significant, demonstrating that a large volume of coins changed hands over the last 12 months,” noted Glassnode. “Conversely, just 25% of the supply was acquired at prices above $30k, held by buyers from the 2021-22 cycle.”
For Bitcoin, the 75:25 ratio represents an “equilibrium point” where 50% of all trading days have seen a higher profit/loss balance, and vice versa. According to Glassnode, the market usually takes time to digest this level once it is reached, with analysts referring to this time as an “accumulation period” between halving events.
Accumulation periods, Glassnode explained, are characterized by a lack of macro market directions, and sideways yet volatile trading for several months. “With the market back at this equilibrium point, it remains to be seen if a similarly lengthy and choppy process is needed to overcome it,” the report read.
Glassnode has previously remarked that Bitcoin’s current behavior is mimicking that of early-stage bull markets. Coins are in an “ongoing transfer of wealth from investors with high time preferences towards HODLers,” while smaller BTC holders (<1 BTC) are stacking coins harder than they have since the 2017 cycle top.
Issuance 🔵 is ~27.0k $BTC/mth
For every 1 new coin, Shrimp are taking 1.25 off the market.
Crazy conviction on display. pic.twitter.com/2n7BdwBuWw
— _Checkɱate 🔑⚡🌋☢️🛢️ (@_Checkmatey_) July 5, 2023
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, believes that if miners start to horde their coins going into next year, the supply crunch could send Bitcoin’s price to $120,000 by 2025.