On-chain data shows that Bitcoin is currently retesting historically significant levels that have often determined the direction of cryptocurrencies’ prices.
Bitcoin is retesting the 0.85 supply quintile
In a new post on X, on-chain analytics firm Glassnode talks about how Bitcoin is retesting historically “make-or-break” levels for assets.
Related books
The problem levels are part of Glassnode’s Supply Quantile Cost Basis Model. This model reflects price levels that correspond to important criteria of profitability for investors.
Below is a chart shared by this analytics company that shows how the levels of this model have changed over the past few years.
Looks like BTC is currently trading around the middle band | Source: Glassnode on X
As seen in the graph, Bitcoin soared above the 0.95 quantile during its recent rally to an all-time high (ATH). This level corresponds to 95% of the supply being profitable.
However, due to the subsequent market downturn, the cryptocurrency fell below that level. Recently, the asset has retested the 0.85 quantile located at $109,000.
BTC has already experienced brief dips below this mark, but so far it has managed to recover above this mark each time. The coin is currently trading just around that level, indicating that around 85% of the supply is holding net unrealized gains.
In the past, Bitcoin’s interaction with this level has tended to influence its trajectory. “Holding it caused a big rally, but losing it often leads to a decline towards the 0.75 band,” Glasnod noted.
The 0.75th quintile is currently equivalent to $98,000. It is currently unclear whether BTC can sustain above the 0.85 quantile or if there will be a return to this level.
In other news, Bitcoin’s recent drop below $107,000 occurred in parallel with the negative value of the Coinbase premium gap, as CryptoQuant community analyst Maartunn noted in an
The Coinbase Premium Gap measures the difference between the Bitcoin price listed on Coinbase (USD pair) and the Bitcoin price listed on Binance (USDT pair). This metric basically shows how user behavior on the former exchange differs from user behavior on the latter platform.
Related books
As the graph below shows, the indicator was at a positive level on Wednesday, but on Thursday the indicator turned red.
This trend would suggest that Coinbase traders, which are primarily comprised of US institutions, sold cryptocurrencies with higher intensity than Binance’s global whales during Bitcoin’s drawdown.
BTC price
Since the wave of selling on Coinbase, Bitcoin has recovered to the $109,500 level and regained the 0.85th mark again.
Featured images from Dall-E, CryptoQuant.com, Glassnode.com, charts from TradingView.com