Since July 2022, 14% of the total supply of Bitcoin has been reallocated. A redistribution of coins occurs in the market as a result of capitulating during the discovery phase of a Bitcoin bottom by some enfeeble clients due to declining investor profitability. According to Glassnode‘s most recent weekly analysis, the cost-basis of about 20.1% of the supply is currently within the threshold.
Such a period has previously occurred throughout cycles when the cryptocurrency fell below the “realised price” and lingered between that level and the “balanced price.”
The realised price is a price model that represents the average investor’s cost basis in the market, whereas the balanced price is a model that represents the cryptocurrency’s “fair value”.
6.1% of the entire supply already has its cost-basis between the realised price and the balanced price levels prior to the bottom discovery.
What’s different in this Bitcoin cycle?
This redistribution, when compared with the previous Bitcoin cycle at the beginning of the 2018–19 bottom discovery phase, shows that approximately 7.65% of the total supply had its cost-basis within the range. 30.36% of the supply was still within the range at the end of the bottom discovery phase (when the currency exited above the realised price), indicating that 22.7% of the coins were traded during this time.
Discovery phase or initial research is a process that takes place before kicking off project development. It is focused on identifying your target audience, their problems, and needs.
Clearly, this amount of redistribution has not yet occurred in the current cycle. According to the research, this may indicate that the market’s downfall might experience more situations like it already has, before a bear market bottom is seen.
It is important to note that this research comes just after Morgan Stanley’s analysts stated that blue-chip investors are trailing behind, When it comes to buying Bitcoin (BTC) and other cryptocurrencies mirrored the above mentioned reports. It is important to note that, in a recent event Brazilian city included “Bitcoin Pizza Day” in its calendar.