6 months ago 2 min read

Bitcoin Aims 'Textbook' Bottom as $16k Whale Cost Basis Comes Into Play

Bitcoin Aims 'Textbook' Bottom as $16k Whale Cost Basis Comes Into Play

The price paid for “whale coins” could be a new bear market bottom zone for Bitcoin.

New research has found that whales—large investors with significant holdings—are significantly driving the price of Bitcoin.

In its latest weekly newsletter, The Week On-Chain, analytics firm Glassnode reported on Bitcoin's "whale cost basis," defined as the current value of a single bitcoin.

Aggregate Price Paid Joins Whale Support Lines

BTC price action is currently characterized by sideways movement and low volatility. As analysts prepare for big changes, however, Glassnode is considering where the current bear market might bounce.

In "The Week On-Chain", whale alerts showed that whale buying and selling began to slow down in August following the current macro lows of $17,600 seen in June. This phenomenon copied behavior from 2019, and if history repeats, an equilibrium period should now be ensuing for whales where selling becomes buying.

In addition to the relative neutrality across small to medium-address cohorts, the Accumulation Trend Score for whales holding 1k–10k BTC highlights aggressive accumulation since late September.

"Whales owning >10k BTC are biased towards weak distribution over recent months."

Under current circumstances, whales have purchased $15,800 worth of Bitcoin — a solid potential safety net should the market go for a bearish bottom.

Glassnode stated that it can estimate the average price of Whale Deposits/Withdrawals since January 2017 by stamping deposits and withdrawal volumes of the whale cohort (1k+ BTC) to/from exchanges.

Bitcoin whale activity annotated charts. Source: Glassnode

Costs Basis Sets A Price Precedent

Whalemap analytics revealed that $19,000 is the key support zone of the moment based on whale buy-ins.

Resistance in the form of $20,380 has also dictated the extent of intraday upside.

In its own monthly newsletter, "The Bitcoin Monthly," investment giant ARK Investments meanwhile put Bitcoin's overall investor cost basis at $19,000.

Regardless, expectations continue for a capitulation to give the market a new macro low sooner rather than later.

"In many ways, many on-chain metrics, market structure, and investor behavior patterns are dotting of the i's, and crossing the t's for a textbook bear market floor," Glassnode concluded.

"A principle piece which is missing is duration, of which history would suggest there may be several months still ahead before a full recovery."
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