Key Points:
- Bitcoin’s recent price surge in November triggered a supply gap within the $70,000 to $80,000 range.
- A dip below $80,000 may provoke a considerable drop, with major support centered around $70,000.
- About 20% of Bitcoin’s total supply is presently at a loss.
Bitcoin’s (BTC) ongoing price pullback may intensify if it drops below $80K, as on-chain analysis from Glassnode shows that the $10K price range below this level experienced weak economic activity late last year.
Prices of BTC quickly surged from $70K to over $80K in early November following pro-crypto policies under President Trump. Consequently, very little BTC changed hands within this price bracket, creating what is known as a “supply gap,” which is evident in Glassnode’s UTXO Realized Price Distribution (URPD) chart.
This metric tracks the price points at which existing bitcoin UTXOs were last moved, with each bar representing the volume of bitcoin that changed hands within a specific price range. By assessing the total number of traders with acquisition prices between $70K and $80K, it appears that transactions in this range are fewer compared to other levels. Hence, a fall below $80K might yield minimal bargain hunting from holders looking to acquire more at their purchase prices, leading to limited support before reaching $73K, the all-time high recorded in March 2024.
Moreover, Bitcoin currently trades above $80K, yet around 20% of the entire supply is at a loss—indicating that these holdings were acquired above the current price of $83K. Consequently, these wallets could increase selling pressure if the price drops below $80K, precipitating a rapid decline.
Glassnode indicates that approximately 100,000 BTC has been sold by short-term holders due to market corrections, while a lack of supply coupled with subdued demand has led to a 30% pullback from Bitcoin’s all-time high of $108K.
BTC: Entity Adjusted URPD (Glassnode)
