On-chain analysis firm Glassnode has highlighted how Bitcoin’s latest rejection occurred within a zone containing some historically important price base levels.
Bitcoin Could Find Support at -1 SD of STH Realized Price Below
In his last weekly reportGlassnode has talked about a key cost base zone that Bitcoin recently retested. The region in question involves two main on-chain metrics: the short-term holder cost basis and the actual market average.
The first of these, the short-term holder cost basis, measures the average acquisition price of short-term holders (STH), investors who purchased their Bitcoin over the last 155 days.
Statistically, the longer investors hold their coins, the less likely they are to ever sell them. Since STHs represent the new entrants to the market with a relatively low dwell time, they can be considered the weak side of the market.
Due to their fickle nature, STHs tend to be sensitive to new evidence of their cost base. In bearish periods, this can manifest as panic selling around their break-even point, while in bullish phases they accumulate more at that point.
The other level of relevance in the chain here, the True Market Mean, tracks the cost base of active market participants. Its goal is to provide a balance point for the network as a whole.
Currently, the True Market Average is at $78,000, while the STH Cost Base is at $79,000. Together, these two levels mark a zone that could act as resistance for any rally in this bearish environment.
And in fact, BTC’s recent recovery attempt stopped around these levels. As Glassnode explains:
This behavior is a textbook pattern in bear markets, where price approaches the equilibrium level of the most price-sensitive cohort, the incentive to exit positions overwhelms incoming demand, exhausting bullish momentum.
With Bitcoin rejected from this zone, the next major level of interest could be a standard deviation (SD) from the STH cost base. Below is a chart that maps some SDs of the metric for BTC.
On the chart, you can see that after the rejection at the STH cost base, the next level is the -1 SD at $68,000. In the past, this level has often acted as a support point. It now remains to be seen if Bitcoin will make another attempt at the resistance zone of the real market average and the STH cost base or if it will have to resort to support.
The previous BTC rally that faded is also visible through the lens of STH Realized Profit. As can be seen in the chart below, STHs increased their profit taking as the BTC price rose.
BTC Price
Bitcoin has fallen to the $76,400 mark since its pullback.
