On-chain data shows that Bitcoin has been trading within a large cost basis cluster lately, and the latest rally hasn’t moved past this range either.
Bitcoin URPD shows that a significant supply has a cost basis close to current levels
In a new after on X, analyst Ali Martinez discussed the latest data for Bitcoin’s UTXO Realized Price Distribution (URPD). This on-chain indicator tells us about the amount of BTC last purchased at the different price levels the cryptocurrency has visited in its history.
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Below is the chart shared by Martinez showing what Bitcoin’s URPD currently looks like.
As visible in the chart, there are some levels close to the current spot price, with a notable amount of last purchased supply present, according to the URPD. Obviously, the investors holding coins with a cost basis at any of these levels below the last price would be making some profit right now, while the investors above that would be underwater.
However, the latest price increase has ensured that the majority of investors within this cluster are now in the green. The chart shows that this supply zone is between $63,100 and $73,200. After rallying back above $72,000, BTC has climbed to the end of this range, but has not yet left it.
In general, investors who are experiencing losses tend to respond to a retest of their cost basis by selling, as they may fear going back underwater. Profitable hands, on the other hand, can accumulate more based on their cost to defend it.
Referring to the cluster between $63,100 and $73,200, the analyst noted:
This is where millions of holders “voted” on the price. As long as we trade within this range, these investors are psychologically incentivized to defend their buy-in.
Outside of this range, the offer on the URPD is relatively limited to $82,000. While this means that Bitcoin won’t find much support at those levels, it also implies that resistance from investors exiting based on their costs could also be relatively low. However, it remains to be seen how the price action will unfold in the coming days and whether the cryptocurrency will venture out of range.
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In another X afterMartinez also talked about the URPD for Ethereum, the second largest digital asset by market cap. As visible in the chart below, ETH has major clusters at $2,079 and $1,882.
After the latest price recovery, Ethereum is hovering above both levels. “If the price falls below these levels, millions of holders of $1,584, $1,238 and $1,089 are likely to defend their original ‘buy-in’ price, creating a new bottom,” the analyst explains.
BTC price
Bitcoin has seen its recovery stall since Tuesday as the price is still trading around $72,400.
Featured image of Dall-E, chart from TradingView.com