On-chain analytics firm Glassnode has pointed out that Bitcoin’s latest price rejection occurred within a zone that includes some historically important cost basis levels.
Bitcoin Could Find Support at -1 Standard Deviation of the STH Realized Price Next
In its latest weekly report, Glassnode highlighted a key cost basis zone that Bitcoin recently tested. This zone involves two major on-chain metrics: the Short-Term Holder Cost Basis and the True Market Mean.
The Short-Term Holder Cost Basis measures the average purchase price of short-term holders (STHs)—investors who have held their Bitcoin for less than 155 days. Statistically, the longer investors hold their coins, the less likely they are to sell. Since STHs are newer to the market with shorter holding periods, they are considered the weaker side. Because they can be easily spooked, STHs often react strongly when the price tests their cost basis. In bear markets, this can lead to panic selling near their break-even point, while in bull markets, they tend to buy more at that level.
The other key metric, the True Market Mean, tracks the average cost basis of active market participants. It aims to represent the overall break-even point for the network. Currently, the True Market Mean is at $78,000, and the STH Cost Basis is at $79,000. Together, these two levels form a zone that could act as resistance for any rallies in the current bearish environment. And indeed, Bitcoin’s recent recovery attempt stalled around these levels.
As Glassnode explains: “This is a textbook pattern in bear markets. When the price approaches the break-even level of the most price-sensitive group, the urge to exit positions outweighs incoming demand, draining upward momentum.”
With Bitcoin rejected from this zone, the next key level to watch could be one standard deviation (SD) below the STH Cost Basis. The chart below shows some SD levels for Bitcoin. It reveals that after being rejected at the STH Cost Basis, the next level is -1 SD at $68,000. In the past, this level has often served as support.
It remains to be seen whether Bitcoin will try to break through the resistance zone of the True Market Mean and STH Cost Basis again, or if it will fall back to this support level.
Bitcoin’s earlier rally fading is also visible through the lens of STH Realized Profit. As the chart below shows, STHs increased their profit-taking as Bitcoin’s price rose.
BTC Price
Bitcoin has dropped to around $76,400 after its pullback.
Featured image from Dall-E, chart from TradingView.com
Frequently Asked Questions
Here is a list of FAQs about Bitcoin being turned away at a key cost basis zone and the potential for 68000 to become support
BeginnerLevel Questions
1 What does Bitcoin got turned away at a key cost basis zone mean
It means Bitcoins price tried to go higher but hit a wall That wall is a price level where a lot of people bought Bitcoin before When the price returns there those people try to sell just to break even which pushes the price back down
2 What is a cost basis zone in simple terms
Its a price range where the majority of Bitcoin holders bought their coins Think of it like a big group of people who all bought tickets at the same price If the price drops to that level they are nervous and might sell to get their money back
3 Why is 68000 being talked about as the next support level
Because after Bitcoin failed to break through the higher cost basis zone it fell back Analysts look at history and see that 68000 is a price where many people bought before so it might act like a floor where buyers step in to catch the price
4 If Bitcoin hits 68000 does that mean its a good time to buy
Not automatically It could be a good entry point if the price holds there but its not guaranteed If 68000 breaks the price could fall further You should wait for signs that the price is actually bouncing up from that level before buying
5 Is this just a guess or is there real data behind this
Its based on onchain data specifically the Realized Price or UTXO Age Bands Analysts look at where large amounts of Bitcoin were last moved If a lot of coins were bought near 68000 it becomes a psychological and technical support zone
AdvancedLevel Questions
6 What exactly is the key cost basis zone that rejected Bitcoin
Its the shortterm holder cost basis often around the 7200073000 area This group is the most likely to sell when the price returns to their purchase price creating strong resistance