As of October 14, Bitcoin is trading at $81,695, encountering significant resistance from recent buyers while still supported by on-chain demand. According to Glassnode's latest report, the estimated cost bases for Bitcoin buyers over the past two years are approximately $88,000 and $100,000.
Recent market dynamics indicate that buyers who acquired Bitcoin 6 to 12 months ago have a cost basis near $88,000, while those who purchased 1 to 2 years ago are closer to $100,000. This overhead supply has been a barrier for Bitcoin, preventing it from breaking above these critical levels.
Glassnode also highlights that Bitcoin's True Market Mean, representing the average cost basis of active investors, is around $78,000. Notably, the U.S. spot ETF cost basis is estimated at about $81,500. Bitcoin has dipped below this benchmark on several occasions but managed to close above it each time.
Since October 7, ETF demand has diminished significantly, resulting in net outflows of approximately $760 million. This decline in ETF support has raised concerns about Bitcoin's ability to maintain its price amid increasing selling pressure.
While long-term holders have largely ceased selling at a loss, profit-taking has surged, complicating the market landscape. Glassnode reports that profit-taking now outpaces loss-spending, which could hinder potential rallies.
Macro conditions are also affecting Bitcoin's price, with inflation rates exceeding forecasts. The upcoming Federal Reserve meeting on October 28 may further influence market sentiment and price action.
In summary, Bitcoin remains boxed in between firm support levels and substantial overhead supply. A daily close above $88,000 and a resurgence in ETF inflows are crucial for overcoming current resistance and demonstrating renewed demand.
