An on-chain analyst has explained how Bitcoin could be in the middle of a decision point based on its supply cost basis distribution.
Bitcoin Is Currently Retesting A Major Supply Cluster
In a new post on X, analyst Checkmate discussed how Bitcoin is currently positioned based on its UTXO Realized Price Distribution (URPD). The URPD is an on-chain indicator that illustrates what part of the BTC supply was last purchased at varying price levels throughout the cryptocurrency’s history.
Below is the chart for the metric that the analyst shared in the post.
As depicted in the graph, a significant portion of Bitcoin’s supply was acquired within the price range where BTC has been trading recently. Notably, two large supply clusters are apparent at these levels.
When Checkmate shared the chart yesterday, Bitcoin’s price was fluctuating between the two supply walls. Investors who purchased at the lower wall were currently in profit, while those who bought at the upper wall were experiencing losses.
The analyst described the asset’s position as being “right in the middle of a decision point.” This is pertinent as any substantial price movement from this juncture could affect the profit-loss landscape of numerous addresses.
According to on-chain analysis, large supply walls located beneath the current BTC price are often viewed as potential support levels since investors who acquired coins there may defend their break-even price during a retest.
Conversely, resistance levels above may entice holders to sell their stakes, allowing them to recover their full investments.
Since the post, Bitcoin has witnessed a minor pullback, leading the asset to lean toward the green supply zone. This area may serve as a protective barrier, preventing BTC from dropping below it due to the significant supply purchased within this range.
Naturally, the future trajectory of Bitcoin could substantially influence market sentiment. As stated by Checkmate, “all it will take is one big red or green candle from here to convince people of a lower high, or bull continuation, respectively.”
Bitcoin is also positioned near a macro on-chain support level: the short-term holder Realized Price. As CryptoQuant community analyst Maartunn detailed in an X post, this critical level is situated at $93,364.
The short-term holder Realized Price represents the average cost basis of Bitcoin holders who purchased their assets within the last 155 days. Historically, this level has acted as a dividing line between bullish and bearish trends for BTC.
BTC Price
At the time of writing, Bitcoin is trading around $94,000, reflecting a 1.5% decrease in the last 24 hours.
