Bitcoin repeats key bear market moves as $19K becomes key BTC price zone
Bitcoin (BTC) holding $19,000 may be more important than traders realize, new data shows.
In the latest edition of its monthly report series, “The Bitcoin Monthly,” investment management firm ARK Invest flagged an ongoing battle to defend Bitcoin’s investor cost basis.
Bitcoin investor cost basis bends the market
Bitcoin price action is currently characterized by volatile movements within a clearly defined range only around $4,000 across.
Having held since June, this series contains what immediately stands out as a focal point – the previous halving cycle’s all-time high of $20,000.
However, with BTC/USD crossing this threshold frequently, traders have long sought alternative lines in the sand when it comes to emerging trends for the pair.
For ARK and the report’s guest contributor, Reflexivity Research co-founder William Clemente, that’s $19,000, which could serve as vital support.
This is due to Bitcoin’s so-called investor cost base – the total price at which the BTC supply was purchased, minus the portion owned by miners.
“For most of September, bitcoin traded between two major historical levels: its 200-week moving average ($23,500) as resistance and its investor cost basis as support ($19,000),” ARK explained.
The BTC price is now at $19,000, which is the level that, if breached, would cause significant losses throughout Bitcoin’s investor base.
“As strong holding behavior battles against a weak macro environment, resolution to both sides will play a significant role in bitcoin’s performance in the short to medium term,” the report added.
As Cointelegraph reported this week, analysts are taking a hard look at the total share of supply currently held at a loss.
In previous bear markets, this always crossed 60% before a price bottom was hit, leading them to conclude that in 2022 the market has further to fall.
Investor cohorts echo 2018 behavior
Additional figures covering the losses of long-term holders (LTHs) paint a similar picture from mid-September – BTC price action may target $14,000 before reflecting past market bottoms.
Related: Bitcoin still has $14K target, trader warns as DXY due to ‘parabola’ breach
ARK further noted that the cost basis for LTHs and short-term holders (STHs) had crossed for the first time since 2018 – the year of the macro low of $3,100 at the end of the fourth quarter.
An STH is defined as a unit that holds BTC for up to 155 days, with LTHs constituting investments for longer periods.
“The short-term holder (STH) cost basis has crossed below the long-term holder (LTH) cost basis, a signal usually correlated with high conviction market bottoms,” the report commented.
“Likely a sign of low speculative overshoots, this cross suggests that short-term owners have capitulated or are aging to long-term owners.”
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