BTC Faces Risk of Converting $77.7K Level From Support to Resistance as New Investors Show Losses
Recent Bitcoin purchasers find themselves in unrealized loss territory as market analysts identify $77,700 as a crucial price threshold that may transform into a BTC resistance barrier.
Bitcoin (BTC) faces the possibility of converting $77,700 from a support level into new resistance as investors who purchased recently find themselves holding losses in aggregate, according to market analysis.
Key points:
- Bitcoin has dropped beneath $77,700, representing the average acquisition price of purchasers from the past one to three months, potentially transforming this level into resistance.
- Data highlighting profitability metrics points to a support threshold located at $68,400, representing a 12% aggregate unrealized loss for this buyer group.
- Short-term Bitcoin holders are on the verge of entering net loss territory, with their average cost basis standing at $75,832.
The $77,700 average cost basis may transform into a resistance barrier
Information sourced from onchain analytics provider CryptoQuant reveals that BTC/USD has moved beneath the realized price, representing the average cost basis, of market participants who acquired their positions within the one to three month timeframe.
This particular investor group is characterized as speculative market participants who demonstrate heightened sensitivity to near-term price fluctuations. Historically, their average cost basis has established upward-trending support levels throughout Bitcoin's bullish cycles.
"Should BTC drop beneath this threshold, the identical cost basis may subsequently function as resistance given that traders holding underwater positions utilize a recovery to their entry point as a chance to liquidate their holdings," a CryptoQuant contributor explained in analysis published Monday.
The average cost basis, calculated using CryptoQuant's Trader Onchain Realized Price Bands measurement tool, presently registers at $77,700, whereas BTC/USD is exchanging hands near the $76,500 mark.
"An additional notable observation is that the Trader Realized Price has maintained a consistent upward trajectory even as BTC has undergone correction. The differential between current price and the cost basis has experienced substantial narrowing," the contributor further noted.
BTC/USD descended below the Trader Onchain Realized Price following continuous trading above this metric since Aug. 19. The Price Bands framework incorporates upper and lower trailing thresholds surrounding the cost basis that are established at predetermined profit and loss percentages. The closest lower band relative to the cost basis is positioned at a 12% collective loss, presently equivalent to $68,400. The price most recently penetrated this level at the beginning of June, then deviating as much as 12.6% beneath the band throughout the subsequent month.
Short-term Bitcoin holders witness diminishing profitability
Beneath the $77,000 threshold, Bitcoin is simultaneously nearing the realized price of the more expansive speculative investor category identified as short-term holders (STHs), representing another trendline that operates as support throughout upward price movements, in addition to functioning as resistance when downtrends experience reversals.
This cohort encompasses entities that have maintained their BTC holdings without executing sales for a maximum of 155 days and possess an average cost basis of $75,832 as of Tuesday. This figure corresponds to a 1.012 reading on the group's Market Value to Realized Value (MVRV) Ratio indicator, which calculates the ratio between the market value of STH holdings and their realized value, determined by the prices at which these coins were last transferred onchain.
The indicator demonstrates that after price moves below the MVRV equilibrium threshold corresponding to the STH realized price, the subsequent critical psychological support zone represents an MVRV measurement of 0.85. This zone is characterized as a region of "tactical capitulation" or "short trap."
Early June similarly represented the most recent occasion when BTC/USD penetrated beneath the 0.85 MVRV threshold, later reclaiming this level during mid-August.
