On-chain analytics firm Glassnode has revealed how Bitcoin could be at risk of a further drawdown after trading at a significant discount to a key cost basis level.<\/p>\n
In its latest weekly report, Glassnode<\/a> has talked about how Bitcoin has dropped a notable distance below the short-term holder (STH)<\/a> Realized Price. The \u201cRealized Price<\/a>\u201d here refers to an on-chain metric that tracks the cost basis of the average investor or address on the BTC network.<\/p>\n To any investor, their break-even mark tends to be a level of particular importance, as retests of it can potentially flip their profit-loss situation. Due to this, Realized Price levels have often shown interactions with the asset\u2019s price, as investors make moves to either exit with their money back or buy more to defend their cost basis.<\/p>\n A group that\u2019s considered particularly sensitive to short-term volatility is the STH cohort, made up of the investors who purchased their coins within the past 155 days.<\/p>\n The Realized Price of the STHs generally provides support during bullish trends, but with the recent market crash, Bitcoin has plummeted under it.<\/p>\n As displayed in the above chart, Bitcoin at its post-crash levels is trading significantly below the STH Realized Price located at $112,500. This means that members of the cohort are now notably underwater.<\/p>\n \u201cHistorically, discounts with such depth from this level have increased the likelihood of further downside toward lower structural supports,\u201d explained Glassnode. One such support is the Active Realized Price<\/a>, corresponding to the cost basis of the \u201ceconomically active\u201d part of the BTC supply.<\/p>\n A chunk of the cryptocurrency\u2019s supply has been dormant for so long that it can safely be presumed lost. In other words, these tokens will never make their way back into circulation. Such coins have no effect on the market today, so the Active Realized Price excludes them from the data, labeling them \u201ceconomically inactive.\u201d<\/p>\n The report noted that this level \u201chas often served as a critical reference point during extended corrective phases in prior cycles.\u201d At present, the indicator is sitting near $88,500.<\/p>\n