After the recent bullish momentum observed early this year, Bitcoin price has shown a small correction move and is now closer to $90,000 than it was a week ago. While BTC’s most recent retracement raises suspicions of resistance near $94,000, the latest on-chain assessment hypothesizes the presence of a more relevant resistance just below $100,000.
The cost basis for new whales is around $99,000
On-chain analyst Axel Adler Jr. recently took to the social media platform X part an interesting hypothesis about the Bitcoin price trajectory. His on-chain observation was based on the realized price New Whale STH vs. Old Whale LTH indicator.
For context, this measure compares, on average, the acquisition costs of recently accumulated whale holdings (short-term holders) to that of Bitcoin’s long-term whale holdings.
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Axel Adler Jr. shared in his post that new whales have an average entry price of around $99,000. Currently, Bitcoin has a valuation of almost $90,000, meaning the new whales are holding strong despite unrealized losses.
If the leading cryptocurrency rises to these whales’ average purchase price of $99,000, the crypto expert explained that these investors could be incentivized to sell their holdings. This means that these large BTC holders exit the market at break-even prices, or with minimal losses.
When the largest Bitcoin investors sell their holdings, the effect often translates into the price through reduced buying momentum and a simultaneous increase in downward pressure. As a result, these investors’ entry price – in this case $99,000 – becomes a major resistance, both psychologically and technically.
The average long-term cost for whales is $39,000
In a separate post on the CryptoQuant platform, on-chain analyst Arab Chain says revealed the average cost basis for different cohorts of Bitcoin investors. As the new whales endure their unrealized losses, the Binance metric for user deposit addresses tells a fascinating story.
According to the analyst, the average holding fee on Binance is around $52,691, indicating that a large portion of Bitcoin traders are doing this while enjoying their profits.
Interestingly, the mining whales are not left out of this comfort zone. This group of holders, who have more than 1,000 BTC stashed away, has an average holding cost of $58,681. Considering that the price is well above their cost base, this suggests that Bitcoin miners are also making big profits. As a result, there is expected to be minimal selling pressure from this market group.
For Bitcoin’s Long-term Holder whales, the story is rosier. These investors are holding their coins with an average purchase price of $39,681. As is intuitively clear, this group of BTC holders also operates within clear boundaries of profit.
Ultimately, it is clear that Bitcoin has a structurally bullish outlook, with unwavering investor support. If downside momentum were to come to the market, it would likely be short-lived as the oldest traders appear to be under no pressure to shave off their positions. If retracements sponsored by these investors occur, they will likely be the result of mild profit-taking rather than capitulation events.
At the time of writing, Bitcoin’s price is around $90,624, with no significant movement since the past day.
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Featured image from iStock, chart from TradingView