Bitcoin sees “textbook” bottom as $16K whale cost base comes into play
Bitcoin (BTC) has a new downside price target as more research highlights the potential role of whales in setting a macro floor.
In the latest edition of its weekly newsletter, The Week On-Chain, research firm Glassnode provided new insight into Bitcoin’s “whale cost base”.
Total price paid joins whale support lines
BTC price action is currently all about sideways movement and some of the lowest volatility ever seen.
While analysts prepare for major changes, however, Glassnode considers where the current bear market may bounce.
Looking at whale buying and selling, “The Week On-Chain” showed a risk-relieving event in August following the current macro lows of $17,600 set in June.
This phenomenon copied behavior from 2019, and if history repeats itself, there should now follow an “equilibrium period” for whales where selling becomes buying.
“In addition to the relative neutrality across small to medium address cohorts, the accumulation trend score for whales holding 1k–10k BTC highlights aggressive accumulation since late September,” Glassnode explained.
“Whales owning > 10K BTC are biased towards weak distribution in recent months.”
As such, under current circumstances, the aggregate price paid by whales for their Bitcoin is $15,800 – a solid potential safety net should the market head towards a bearish bottom.
“By price-stamping the deposits and withdrawal volumes of the whale cohort (1k+ BTC) to/from exchanges, we can estimate the average price of whale deposits/withdrawals since January 2017. This whale cost base is currently around $15.8k,” Glassnode added.
Cost basis sets a price precedent
As Cointelegraph reported, other research is also looking at how Bitcoin’s biggest investors shape price action.
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Analytics platform Whalemap revealed $19,000 to be the key support zone at the moment based on whale buying, a line in the sand that has since held.
Resistance in the form of $20,380 has also dictated the extent of intraday upside.
In its own monthly newsletter, “The Bitcoin Monthly,” investment giant ARK Investments, meanwhile, put Bitcoin’s total investor cost base at $19,000.
Regardless, expectations for a capitulation to give the market a new macro low sooner rather than later continue.
“In many ways, many chain metrics, market structure and investor behavior patterns dot the i’s and cross the t’s for a textbook market,” Glassnode concluded.
“A key missing piece is duration, as history suggests it may be several months before a full recovery.”
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