Data shows that the various cohorts of Bitcoin investors now have their cost bases in a tight range. Here’s what this can tell us about the current market.
All Bitcoin Investor Groups have a cost base between $18.7k and $22.9k
This is according to the latest weekly report of Glasnodethe cost basis of the broader BTC market is currently around $20.2k.
Here, the “cost basis” refers to the price at which the average investor in the Bitcoin market purchased their coins.
The entire market can be broken down into two major investor cohorts, the “short-term holders” (STHs) and the “long-term holders(LTHs).
The STH group includes all investors who acquired their coins in the last 155 days. The LTHs, on the other hand, are composed by holders who have owned their coins for more than 155 days.
Statistically, the LTH group is the cohort least likely to sell their coins at any given time, as the longer investors hold onto their coins, the less likely they are to break their dormancy.
The cost basis of each of these two groups is the price at which the average investor belonging to the said cohort bought their coins.
Here’s a chart showing the trend in the cost base of both LTHs and STHs, as well as that of the broader Bitcoin market:
Looks like the price was rejected by the STH cost-basis not too long ago | Source: Glassnode's The Week Onchain - Week 49, 2022
As you can see in the chart above, the cost base of the Bitcoin STHs has decreased as the bear market continues, which makes sense since this cohort only includes investors who have bought recently. Of course, “recent” prices have been lower and lower during the bear.
The LTH cost base shows a slightly upward trend as investors who bought during the higher prices are now part of this group. Currently, this metric is worth $22.9k.
This is not far off the $18.7k cost base of the STHs and the $20.2k cost base of the wider market. This means that the different investor groups in the current market have bought their coins at similar prices.
The implication of this is that the perceived risk and probability is the same for all holders, both short and long term. “As such, it is more likely that the overall market will begin to behave in a more cohesive manner in response to volatility,” the report notes.
BTC price
At the moment of writing, The price of Bitcoin floating around $17k, up 3% over the past week.
BTC continues to hold still around the $17k mark | Source: BTCUSD on TradingView
Featured image from iStock.com, charts from TradingView.com, Glassnode.com