BTC bulls aim to confirm $20,000 as support as new on-chain data begins to show it has declined.

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Price support can be psychological for some traders, the statistics behind BTC remaining above $20,000 for a week are strong indicators of price support or in other words a new bear market floor. Multiple Bitcoin data points could set a support level at $20,000.

Last week, Bitcoin reached a high of $20,961. However, it never maintained its bullish momentum as the rally faded, failing to break the $21,000 support. As a result of the rally and decline, Glassnode, in its latest report, looks at whether Bitcoin has carved out a bear market floor or not.

Price distribution done
The realized price of Bitcoin shows the average cost that buyers paid for their BTC holdings. If the price of Bitcoin falls below a user’s current price, they technically experience an unrealized loss. For visual purposes, the realized price distribution of UTXO shows the percentage of the distributed supply in the acquisition price.

The 2019 bear market shows that 30% of the total BTC supply was concentrated in the realized price range. In April 2019, the price exceeded the realized price, which marked the beginning of a new bull market.

Bitcoin UTXO made the price distribution in April 2019. Source: Glassnode
If you look at the current market and apply the same methodology, the realized price of Bitcoin concentrates 20% of the supply between $17,000 and $22,000. Although this suggests that further redistribution must occur, the consolidation is significant and highlights a resilient holder base.

Bitcoin UTXO made the price distribution in October 2022. Source: Glassnode
How long until the separation?
The Bitcoin valuation model can indicate how long until a breakout like the one in April 2019. Based on historical data, previous cycles have witnessed realized price ranges that last between 5.5 and 10 months. In the current cycle, Bitcoin is only tied for about three months, which means that the next breakout can only come after several months of sideways trading.

Historical Bitcoin valuation model with realized price range. Source: Glassnode
Related: BTC Price Sees “Double Top” Ahead of FOMC

Long-term holders continue to benefit
The distribution of prices made in terms of long-term holders and short-term holders can also provide information. Currently, long-term holders are the majority of the supply in profit, which means that they have less stress to sell and if they did, they would be in profit. The total amount of the offer in profit is 56%, while for long-term owners it is 60%.

Total offer at benefit and offer of long-term owners at benefit. Source: Glassnode
While previous market cycles have lasted longer than the current cycle, the signs are positive for a repeat breakout. And since long-term holders make up an overwhelming majority of the supply in earnings, selling pressure can be minimized in the event of future sales losses.

Source: CoinTelegraph