Business
The Current State of Bitcoin: Onchain Data and Price Analysis
Explore the latest insights into the current state of Bitcoin through onchain data analysis and price trends. Stay informed with valuable information on the leading cryptocurrency.
The Current State of Bitcoin and Onchain Data
Bitcoin (BTC) is currently striving to recover from the setback it faced in July. However, as it aims to bounce back, new challenges are emerging. Onchain data indicates a potential resistance level at $65,000, adding complexity to its path.
The leading cryptocurrency, Bitcoin, is trading close to $63,200 at the moment, showing a modest 1% increase. This uptick comes after a 7% decline in June, which effectively reversed the gains made in May. The drop in June was fueled by miner selling activities and concerns regarding the nature of ETF inflows, being perceived more as non-directional arbitrage bets rather than outright bullish bets.
One notable aspect of the current scenario is that the price of Bitcoin has dipped below the aggregate cost basis of short-term holders. These are wallets that have held Bitcoin for 155 days or less. According to data from LookIntoBitcoin, the aggregate cost basis for short-term holders is currently at $65,000. This means that many short-term holders are now either facing losses or holding positions in the negative, possibly leading to additional selling pressure around the $65,000 mark.
Analysts at Blockware Intelligence have pointed out that the price of Bitcoin falling below the aggregate cost basis of short-term holders could result in some resistance around the $65,000 level. Historically, a similar situation occurred last summer, leading to a period of sideways trading before a breakout.
On the other hand, long-term holder wallets are in a different position, with their average cost basis significantly lower at around $20,000, as per LookIntoBitcoin data. This substantial difference indicates that long-term holders are more likely to hold onto or even increase their Bitcoin holdings, given that their average cost is nearly 70% less than the current market price of Bitcoin.
Despite the 15% pullback from the all-time high of over $73,500 in March, which might seem significant to traditional market investors, it is considered a normal correction in a bullish market for long-term cryptocurrency holders. Blockware highlighted that such price volatility in Bitcoin serves to weed out weak investors and presents strategic investment opportunities for those with a longer investment horizon.