Glassnode: 14% of Bitcoin supply has been redistributed since July 2022
Latest data from Glassnode reveals that around 14% of the Bitcoin supply has been redistributed since July of this year.
14% of the total Bitcoin supply has changed hands since July 2022
According to the latest weekly report from Glassnode, around 20.1% of the supply now has a cost basis in the historical bottom formation area.
During a Bitcoin bottoming phase, the diminishing investor profitability causes the weaker hands to undergo a capitulation event, resulting in a redistribution of coins taking place in the market.
In recent cycles, such a phase has started with the crypto falling below the “realized price” and has lasted while the crypto has fluctuated between this level and the “balanced price.”
The former is a price model that indicates the cost basis of the average investor in the market, while the latter (the balanced price) is a “fair-value” model for the crypto.
Now, here is a chart showing what the coin distribution in the Bitcoin market looked like at the start of the current bottom formation phase:
6.1% of the total supply was acquired within the range | Source: Glassnode's The Week Onchain - Week 44, 2022
As you can see in the graph above, before the bottom finding started, around 6.1% of the total supply had its cost base between the realized price and the balanced price level.
However, after Bitcoin fell below the realized price and the bottom phase started, coins naturally started changing hands at these levels. After this redistribution, the market looks like this:
The new distribution following the bottom discovery phase | Source: Glassnode's The Week Onchain - Week 44, 2022
20.1% of the total supply now has its cost base within this range, suggesting that there has been a redistribution of coin wealth of around 14% since the month of July.
But how does this redistribution compare to the previous cycle? At the start of the 2018-19 bottom discovery phase, around 7.65% of the total supply had its cost basis within the interval.
At the end of the bottoming phase (which was when the coin went above the realized price), the wealth distribution looked like this:
The end of the 2018-19 bottom formation phase | Source: Glassnode's The Week Onchain - Week 44, 2022
From the graph, it is clear that 30.36% of the supply was within the range at the end, which suggests that 22.7% of the coins changed hands during this period.
Clearly, the current cycle has not seen redistribution at this level yet. The report notes that this could indicate that the market may need to see further consolidation before a bear market floor is fully formed.
BTC price
At the time of writing, Bitcoin’s price is hovering around $20.5k, up 7% in the last week.
BTC continues to stay above $20k | Source: BTCUSD on TradingView
Featured image from Dmitry Demidko on Unsplash.com, charts from TradingView.com, Glassnode.com
