Bitcoin on-chain data shows early signs that BTC bottom is in

While Bitcoin (BTC) price support may be psychological for some traders, the statistics behind BTC remaining above $20,000 for a week are strong indicators of price support or, in other words, a new bear market floor. Several Bitcoin data points may establish a support level of $20,000.

Last week, Bitcoin reached a high of $20,961. However, it never sustained its upward momentum as the rally ended, failing to break the $21,000 support. As a result of the rally as well as the decline, Glassnode analyzes in its latest report whether Bitcoin hammering out a bear market floor or not.

Realized price distribution

Bitcoin’s realized price shows the average cost buyers paid for their BTC holdings. If the price of Bitcoin goes below a user’s realized price, they technically experience an unrealized loss. For visual effect, UTXO Realized price distribution shows the percentage of the offer distributed over the acquisition price.

The bear market in 2019 shows that 30% of BTC’s total supply was concentrated within the realized price range. In April 2019, the price broke out above the realized price, signaling the start of a new bull market.

Looking at the current market and using the same methodology, Bitcoin’s realized price concentrates 20% of its supply between $17,000 and $22,000. While this suggests that more redistribution may need to occur, the consolidation is significant and highlights a resilient holder base.

How long until the outbreak?

Bitcoin’s valuation model can indicate how long it will take for a breakout like in April 2019. Based on historical data, previous cycles have seen the realized price range last between 5.5 and 10 months. In the current cycle, Bitcoin has only been in range for about three months, meaning the next breakout may not happen until several months of sideways trading.

Related: BTC price sees ‘double top’ ahead of FOMC

Long-term owners are still in profit

Utilizing the realized price distribution in the form of long-term owners versus short-term owners can also provide insight. Currently, long-term owners are the majority of the supply in profit, which means they have less stress to sell, and if they did, they would be in profit. The total amount of supply in profit is 56%, while that of long-term owners is 60%.

While previous market cycles have lasted longer than the current cycle, the signs are positive for a repeat breakout. And with long-term owners as an overwhelming majority of the offering in profit, selling pressure can be minimized in case of upcoming sales events.