Ripple Vet Doubts $10K XRP Price Target
Ripple's David Schwartz doubts the $10,000 XRP price target hype.
U.Today1 min read
Bitcoin Rejected At Key Cost Basis Zone—Is $68,000 The Next Support?
TL;DR
Bitcoin faced rejection at a key cost basis zone, as noted by Glassnode. The next potential support level is projected to be around $68,000.
Key points
- Bitcoin rejected at a key cost basis zone
- Next potential support level is around $68,000
- Short-Term Holder Cost Basis measures acquisition price
- Longer holding times reduce likelihood of selling
- STHs represent new market entrants with low holding time
Mentioned in this story
Glassnode
On-chain analytics firm Glassnode has highlighted how the latest Bitcoin rejection came inside a zone containing some historically important cost basis levels.
Bitcoin Could Find Support At -1 SD Of The STH Realized Price Next
In its latest weekly report, Glassnode has talked about a key cost basis zone that Bitcoin retested recently. The region in question involves two major on-chain metrics: the Short-Term Holder Cost Basis and True Market Mean.
The first of these, the Short-Term Holder Cost Basis, measures the average acquisition price of the short-term holders (STHs), investors who purchased their Bitcoin during the past 155 days.
Statistically, the longer investors hold onto their coins, the less likely they become to sell them at any point. Since the STHs represent the new entrants of the market with a relatively low holding time, they can be considered the weak side of the market.
Due to their fickle nature, the STHs tend to be sensitive to retests of their cost basis. In bearish periods, this can show up as panic selling around their break-even mark, while in bullish phases they accumulate more at it.
The other on-chain level of relevance here, the True Market Mean, tracks the cost basis of the active market participants. It aims to provide a break-even mark for the network as a whole.
Currently, the True Market Mean is located at $78,000, while the STH Cost Basis at $79,000. Together, these two levels mark a zone that could act as resistance for the any rallies in this bearish environment.
And indeed, BTC’s recent attempt at recovery hit the brakes around these levels. As Glassnode explains:
This behavior is a textbook pattern in bear markets, where price approaches the breakeven level of the most price-sensitive cohort, the incentive to exit positions overwhelms incoming demand, exhausting upside momentum.
With Bitcoin rejected from this zone, the next major level of interest could be a standard deviation (SD) of the STH Cost Basis. Below is a chart that maps some SDs of the metric for BTC.
Q&A
What is the Short-Term Holder Cost Basis for Bitcoin?
The Short-Term Holder Cost Basis measures the average acquisition price of Bitcoin for investors who purchased within the last 155 days.
Why is the $68,000 level significant for Bitcoin?
The $68,000 level is considered a potential support zone based on historical cost basis metrics highlighted by Glassnode.
What does it mean for Bitcoin to be rejected at a cost basis zone?
A rejection at a cost basis zone indicates that Bitcoin was unable to maintain price levels within a historically significant range, suggesting selling pressure.
How do on-chain metrics affect Bitcoin's price prediction?
On-chain metrics, like the Short-Term Holder Cost Basis and True Market Mean, provide insights into investor behavior and potential price support or resistance levels.
