On-chain data suggests Bitcoin may encounter low resistance at $100,000 and beyond, at least from the perspective of investor cost basis distribution.
A Low Amount Of Bitcoin Supply Has Cost Basis At Levels Ahead
In a new post on X, institutional DeFi solutions provider Sentora (formerly IntoTheBlock) has discussed the various Bitcoin price ranges in terms of investor cost basis as BTC approaches $100,000.
Below is a chart that shows the related data for the price ranges near the latest spot value:
In the graph, the size of the dot corresponds to the amount of Bitcoin supply that investors last purchased inside the associated price range. It appears that all the large dots are under the spot price following the latest rally, indicating that the levels that saw the most demand are now in the green.
Furthermore, it is evident that the ranges ahead—those harboring the cost basis of underwater holders—have only small dots associated with them. In total, less than 3% of the cryptocurrency’s supply has its cost basis at these elevated levels above the spot price.
To any investor, their cost basis is a significant marker, likely prompting a reaction during a retest. Generally, those previously at a loss may react by selling their holdings, fearing a return to negative territory.
Conversely, profitability might encourage investors to buy more during a retest, trusting that their acquisition mark will eventually prove advantageous again.
While these buying and selling behaviors may seem inconsequential in isolation, they can substantially impact Bitcoin’s price when pooled alongside a significant number of investors sharing a similar cost basis.
Currently, Bitcoin only possesses profit ranges, indicating that there are no major resistance levels left in terms of supply distribution. Consequently, an exploration beyond $100,000 may proceed without significant hindrance from break-even sell-offs.
However, while low resistance levels may exist, an entirely different challenge could loom: the prospect of profit-selling. Typically, the likelihood of a mass selloff rises as the number of investors in profit increases.
With the majority of the Bitcoin supply now in the green, potential profit-taking could pose a substantial threat to the rally’s momentum. It remains to be seen whether sufficient incoming demand can absorb the potential selling pressure.
BTC Price
At the time of writing, Bitcoin is trading around $99,400, reflecting a rise of more than 3% over the past week.
