On-chain analytics firm Glassnode has highlighted in a new report how Bitcoin faces a supply glut outside the $98,000 region.
Bitcoin could find resistance above $98,000
In his last weekly magazine reportGlassnode discussed how the recent Bitcoin rally has stalled near the realized price of short-term holders (STHs). The “Realized Price” is an on-chain metric that tracks the cost basis of the average investor or address on the BTC network.
The STH Realized specifically measures the average acquisition level of traders who have made a purchase in the last 155 days. As the chart below shows, this indicator is currently at $98,400.
This level is around the point where the recent recovery run hit a roadblock, possibly due to selling by recent underwater buyers who used the rally to close to their breakeven level.
Glassnode explained:
The recent rejection of the Short-Term Holder cost base of ~$98.4k reflects the market structure observed in the first quarter of 2022, where repeated failures to recover the recent buyer cost base extended consolidation.
The STH Realized Price provides insight into the average breakeven level of a broad part of the market. For a more detailed overview, there is another indicator, the UTXO Realized Price Distribution (URPD).
The Bitcoin URPD chart shows that a significant portion of the STH supply has a cost base between current levels and $98,000 (colored blue). This offering represents the tokens that were redistributed by top buyers to newer market participants during the price surge.
Not all top buyers sold, however, as the chart shows that at levels around and above $100,000, long-term holders (LTH) supply is becoming a notable force (shaded in red).
Coins count towards the LTH cohort once they exceed the 155 day age range. The fact that LTH supply is increasing at these levels suggests that some bull market entrants are willing to hold on.
The analytics company noted:
This unresolved supply glut remains a persistent source of selling pressure, which will likely limit attempts above the $98.4k STH cost base and the $100k level. A clean breakout would therefore require a meaningful and sustained acceleration in demand momentum.
It now remains to be seen what Bitcoin’s coming price action would look like, especially in the context that major supply clusters are still underwater.
BTC price
Bitcoin has been on a downward trajectory since the rejection of the STH Realized Price, as it now trades around $89,100.