Bitcoin Resistance at $78K and $83K Could Cap Rally: Schwab

In brief

• Bitcoin's active investor cost basis at $78,000 stalled the recent rally, with the ETP average cost basis at $83,000 seen as the next key hurdle, according to Schwab’s digital assets strategist.
• The passage of the CLARITY Act is a major catalyst that could reset momentum in the crypto market.
• Strong institutional demand from recent ETF inflows could fuel a breakout rather than a reversal, other experts told Decrypt.

Bitcoin's rally to $78,000 ran into resistance last week, with Schwab's digital assets strategist pointing to two investor cost basis levels that could keep prices rangebound—even as ETF inflows and ceasefire optimism provide underlying support.

The leading crypto is currently trading at around $76,800, down from last week’s high of $77,900, according to CoinGecko data. It is up 2.3% over the past 24 hours, supported by $1.4 billion in crypto fund inflows last week—the strongest weekly total since January.

The active investor cost basis, a measure of the average price paid for Bitcoin acquired via secondary markets, sits at approximately $78,000, the level where last week’s rally stalled, according to Jim Ferraioli, Director of Digital Currencies Research and Strategy at the Schwab Center for Financial Research.

Above that, around $83,000 is the average cost basis across all spot Bitcoin ETPs, a level where new crypto investors may be inclined to sell to recoup losses. The 200-day simple moving average at nearly $87,000 represents the long-term price trend, sitting just above the $83,000 level.

“Both measures suggest that the average Bitcoin investor is currently sitting at a loss,” Ferraioli told Decrypt. “These levels could serve as much stronger areas of resistance than moving averages.”

Institutional demand may absorb selling pressure at those levels, according to Simon Jones, Co-founder and CEO of Reya.

“The 83,000 figure for spot ETP buyers is the more interesting level to watch,” he told Decrypt. “These are largely institutional investors who came in through regulated products, patient capital that came in for structural reasons rather than a quick trade. Given the sustained inflows we've seen, there's a reasonable case that new demand absorbs any profit-taking at that level.”

Key market dynamics

On the bullish side, crypto funds have seen three consecutive weeks of positive flows, with U.S.-led inflows dominating at $1.5 billion last week, according to . Morgan Stanley its spot Bitcoin ETF this month, with Goldman Sachs for its own Bitcoin income ETF shortly after, broadening institutional access and improving the leading crypto's fundamental outlook.