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This BTC Cost-basis Comparison (Realized Price) chart offers a wealth of information on how different classes of Bitcoin holders—ranging from new whales and Binance deposit addresses to miner whales and long-term holders—have built up their cost basis over time. Understanding the dynamics behind these groups can offer us unique insights into where Bitcoin’s price might be headed, what different cohorts are doing, and how sentiment is shaping the market.
We will break down each segment of the chart and analyze what these data points could be signaling for the future of Bitcoin, especially now that the price sits at $58K as of September 2024.
1. New Whales (<155d): Cost-basis at $62.158K
Key Insight: New whales are defined as entities or individuals who have accumulated large Bitcoin holdings within the last 155 days. The cost-basis for this group currently sits at $62.158K, which is about 6% below the current price of $58K.
What Does This Mean? This indicates that the recent entrants into the whale category have a slightly higher cost basis compared to the current price. These whales are potentially in a mild loss, but their relatively shallow underwater position suggests that they might not yet be feeling strong pressure to sell.
Prediction: If Bitcoin's price continues to trade around or below this $62K mark, we could start seeing profit-taking from this cohort if they fear further downward pressure. On the flip side, if the price breaks above this level, these whales might feel more confident holding or even accumulating further.
2. Binance User Deposit Address: Cost-basis at $55.388K
Key Insight: Addresses tied to Binance user deposits have a cost-basis around $55.388K, which is 3% higher than the current price. Binance traders and short-term holders tend to be more active and speculative compared to long-term holders, often moving their coins to and from exchanges based on short-term market movements.
What Does This Mean? Since their cost basis is close to the current price, Binance traders are sitting in a minor profit zone. The small margin here suggests that Binance users might begin selling off if the price stagnates or dips. However, if the price continues rising, they could be incentivized to hold and accumulate further positions.
Prediction: Binance traders could play a pivotal role in short-term market fluctuations. If BTC’s price begins to slide below $55K, these traders could contribute to a short-term sell-off, especially given their propensity for high-frequency trading. Conversely, a rally above $62K might trigger a buying spree from this group.
3. Miner Whales: Cost-basis at $43.125K
Key Insight: This category refers to miners who hold over 1K BTC, and their cost basis currently sits at $43.125K—which is 32% below the current price of $58K. This cohort typically has a much lower cost basis due to their ability to accumulate BTC via mining activities.
What Does This Mean? Mining whales are sitting on significant unrealized profits (over 32%), and this puts them in a favorable position. Historically, miners tend to hold large reserves of Bitcoin, selling only when they need to cover operational costs or when they predict a market downturn.
Prediction: The 32% buffer means miners are unlikely to start aggressively selling unless Bitcoin’s price falls substantially. However, if the price moves significantly above $58K, we might see miners selling small portions of their holdings to lock in profits and maintain their operations. They are long-term believers in Bitcoin and could continue holding, but should operational expenses rise, some could offload at higher price points to cover costs.
4. Long-term Holder Whales (>155d): Cost-basis at $27.824K
Key Insight: This group represents the oldest and most established whales, with a cost-basis of $27.824K, more than 106% lower than the current price of $58K. These whales have been holding Bitcoin for over 155 days, meaning they have survived multiple market cycles and corrections.
What Does This Mean? Long-term whales are sitting on massive gains, and their psychological threshold for selling is much higher. This group is less reactive to short-term price fluctuations and tends to sell only during major market rallies or when they foresee macroeconomic changes that could adversely affect the price.
Prediction: Long-term holders are unlikely to be selling their positions anytime soon, given their deep profit margin. However, if the price rallies towards new all-time highs, we could start seeing some of these whales locking in profits. These holders act as a stabilizing force in the market, and their continued confidence in Bitcoin could provide a strong floor for price support around $30K-40K.
5. Current Price at $58K: A Crucial Junction
What Does This Mean? With the current price hovering around $58K, we find ourselves at a crucial juncture. The new whale category, which entered the market over the last 5 months, is sitting at a loss, while Binance traders are nearly at breakeven. Meanwhile, mining companies and long-term whales are sitting comfortably in profit territory.
Price Action Scenarios:
Bullish Case: If Bitcoin breaks above $62K (the cost basis of new whales), this could trigger a short-term FOMO rally as these new entrants flip from underwater to profitable. Binance traders, sensing the positive momentum, could also pile in to capitalize on the rally, pushing prices toward $70K or higher.
Bearish Case: Should Bitcoin fail to break the $62K resistance, we could see profit-taking from new whales and Binance traders, potentially dragging the price back down towards the $55K region. However, miners and long-term holders provide strong support below $45K, meaning a dip below this level seems unlikely unless there's a major macroeconomic shift.
6. Timeline Breakdown of Bitcoin’s Cost-basis Battle
2017 - 2020: Early Bull Cycle & Accumulation Phase
New Whales (<155d): During this phase, we saw the emergence of new whales and long-term holders who accumulated BTC in the sub-$10K region. These entities likely acquired Bitcoin early on when the market was in its nascent stage. Their cost-basis sits much lower than today’s levels.
Mining Companies & Long-term Holders: Early mining operations and long-term holders, many of whom acquired BTC through mining rewards, have their cost basis under $10K. These investors are pivotal in creating a strong support floor for Bitcoin, even in moments of market turmoil.
2021: The Bull Run to $60K
Binance Deposit Addresses: The historic bull run of 2021 brought a large influx of retail traders, many of whom moved their holdings onto exchanges like Binance. During this time, Binance traders were purchasing at the $40K-$50K range, with their cost-basis settling at approximately $55K.
New Whales Surge: As the price peaked near $60K, new whales entered the market, buying Bitcoin at elevated levels. These are the whales whose current cost-basis sits at $62K, slightly above the current price.
2022: Bear Market Correction
Mining Companies Stabilize: The market crash in 2022 forced Bitcoin’s price down, but miners were largely unaffected due to their low-cost basis. As their profits remained solid, they continued holding, and their cost-basis stabilized around $43K.
Long-term Whales Strengthen: The same period saw long-term holders (those holding for over 155 days) continue to accumulate or hold steady. Their cost-basis, now around $27K, underscores their resilience. Many from this group were unfazed by the crash.
2023 - 2024: Recovery and New Whale Activity
New Whales Accumulate Again: As the market begins to recover in 2023, new whales once again accumulate, now with a cost-basis of $62K. This group is sitting in a mild loss but could catalyze a major rally if the price breaches their entry point.
Mining Companies Hold Profits: The price recovery has miners sitting in a 32% profit margin, making them less likely to sell unless operational costs become a concern. Miners will act as a stabilizing force in the $43K range, ensuring strong support.
Current Price at $58K (Sep 2024): The present price puts us in a consolidation phase where Binance traders and new whales are near their cost-basis. The pressure between buyers and sellers in this range will determine Bitcoin’s next significant move.
7. Deeper Interpretation: Is Bitcoin Under or Overvalued Right Now?
New Custodial Wallets/ETFs at $62K (-6%): The fact that new whales have a cost-basis higher than the current price suggests that there's significant buy-in at this level from institutional or large players, especially given the rise of Bitcoin ETFs. This group might represent long-term believers or speculative entrants who were bullish around the $60K mark but could start selling if the market remains stagnant.
Mining Companies at $43K (+32%): Miners, with their low-cost basis, are sitting on enormous profits and are unlikely to offload significant amounts unless there is substantial downward pressure. Their ability to hold in profit ensures that Bitcoin has strong support in the $40-45K range, creating a safety net for the market.
Old Whales at $27K (+106%): These whales are the ultimate hodlers, with massive gains. Their behavior is critical for market stability. Historically, these whales sell only in bull markets, meaning if we see a strong rally above $62K, their profit-taking could create resistance around all-time highs.
8. Final Thoughts and Predictions:
The BTC Cost-basis Comparison provides unique insights into the behavior of different market participants. The current price at $58K puts us in a consolidation zone, where traders and new whales are testing the waters, while old whales and miners are holding onto their profits.
As we move forward:
A bullish breakout above $62K could trigger a new wave of buying from recent entrants and ETF traders.
A bearish rejection could result in a retracement towards the $55K level, but strong support lies in the $43K-45K range, thanks to miners and long-term holders.
The market is showing signs of healthy consolidation, and it appears that Bitcoin is well-positioned for its next big move—in either direction. $62K will be the critical level to watch in the coming weeks.
Further Readings :
1. The Bitcoin Rainbow Chart EXPOSED : What Your Favourite Analysts WON'T Tell You .
2.ALTSEASON Gold Rush: How to Find the Hidden Gems and Avoid the Scams
3.ALTSEASON ALERT: 7 Shocking Indicators That Will Reveal When the Next Altcoin Boom Will Hit
4.Bitcoin’s Next Big Move: Crash or New ATH? MACD and RSI Give Clear Signals
5.The Shocking Truth About BTC's Hidden Connection to Gold, Stocks, and Cryptos
Disclaimer: The content of this article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are highly volatile and may lead to substantial financial loss. Always perform your own research and consult a qualified financial advisor before making any investment decisions. The opinions expressed are solely those of the author and do not represent the views of the publisher or its affiliates. Investing in cryptocurrencies involves inherent risks, and past performance is not a reliable indicator of future results. Please exercise caution.
