Bitcoin Price Dynamics: Potential Drop Below $80K
Bitcoin’s (BTC) current price retracement may intensify if it falls below the crucial $80K mark. On-chain data analysis conducted by Glassnode reveals that the economic activity at the $10K range beneath this price level was markedly subdued late last year.
The price of BTC surged dramatically from $70K to over $80K in early November, primarily following the pro-crypto Donald Trump’s victory in the U.S. Presidential election. This rapid ascension created what is termed a “supply gap,” as illustrated by Glassnode’s UTXO Realized Price Distribution (URPD) chart. This particular metric meticulously tracks the price levels at which existing bitcoin Unspent Transaction Outputs (UTXOs) were last transacted, with each bar on the chart indicating the volume of bitcoin that changed hands within specified price brackets. Notably, the data is entity-adjusted, which means it provides an average purchase price for each entity, effectively categorizing the total balance accordingly.
Following Donald Trump’s electoral win, Bitcoin’s swift rise from the mid-$60K range to over $100K left minimal supply accumulation between $70K and $80K, as the cryptocurrency traded in this range for only a brief period. As such, the number of traders who acquired Bitcoin at prices between $70K and $80K is likely significantly lower compared to other price levels. Consequently, should the price dip below $80K, there is expected to be little interest from holders looking to buy more at their acquisition costs. This situation could result in minimal support before reaching the $73K level, which marks the all-time high established in March 2024.
Additionally, as Bitcoin consolidates above $80K, it is noteworthy that approximately 20% of the total supply is currently at a loss—indicating that these holdings were purchased at prices above the current market price of $83K. These affected wallets may contribute to increased selling pressure if the price falls below $80K, potentially leading to a swift decline. Glassnode’s data further reveals that around 100,000 BTC have been sold by short-term holders in response to the recent price correction. The combination of diminished supply and lackluster demand has already played a significant role in Bitcoin’s 30% pullback from its all-time high of $108K.
BTC: Entity Adjusted URPD (Glassnode)
