According to Glassnode, bitcoin’s price has risen above the short-term holder cost basis of $61,900 following the Federal Reserve’s 0.5% interest rate cut. The onchain analysis says this marks a notable recovery, with the potential for further technical significance if the price stays above the 200-day moving average of $63,900.

Nevertheless, in spite of this progress, the market remains in a period of consolidation, with capital inflows slowing after the all-time high in March 2024. “Short-term holders are under marginally less pressure as prices rise above their cost basis, after a period of net capital outflows,” the report states.

The analysis further emphasizes that newer investors have shown resilience, with smaller realized losses compared to previous market corrections, including the mid-2021 sell-off and the March 2020 crash.

Despite being underwater, many new bitcoin investors remain confident in the overall uptrend. “The cost basis of younger coins is currently trading below that of older coins, suggesting the market is experiencing a net outflow regime,” Glassnode’s onchain report details.

The researchers add:

Utilizing this indicator, a sustainable market reversal may be in its early stages of developing positive momentum.

The report also compares the current market structure to the 2019-2020 period of extended consolidation, drawing parallels to the gradual market recovery at that time. Additionally, the perpetual futures market reflects cautious optimism.

Although there is increasing demand for long positions, the market has not yet reached the bullish levels seen during previous rallies. Funding rates for long-side leverage have improved slightly, but remain modest compared to early 2023 levels.