The biggest question during the bearish phase so far has been when and where the Bitcoin price will rebound. The latest on-chain data may provide a new answer as to where the price bottom will be in the current bear market.
Here’s why $40,000 could be pivotal in a bear market.
In a recent post on the This forecast is based on the cost base of a group of older investors known as long-term holders (LTHs).
For context, the long-term holder’s cost basis represents the average price at which a Bitcoin investor (holding a coin for more than 155 days) acquires the coin. This price level is often relevant because long-term investors are often referred to as diamond hands, who are less likely to sell during periods of downside volatility.
Moreover, the LTH cost basis tends to act as the ultimate support level in bear markets. That’s because most long-term investors typically still retain profits even in bear markets. Therefore, if the Bitcoin price falls to this support level, long-term holders will double down on their positions.
Source: @ali_charts on X
As you can see in the chart above, this new buying activity from long-term holders will push the price of the leading cryptocurrency above its cost basis. According to the highlighted data, the current LTH cost basis is $40,363, which is approximately 40% of the current price range.
If the Bitcoin price faces further downward pressure and approaches this cost benchmark, it is likely to receive support from increased re-accumulation by long-term investors. So this cost basis could be the bottom in the current bear market.
Conversely, the Bitcoin market could face a much larger correction if selling pressure overwhelms re-accumulation by long-term holders.
Bitcoin Price Overview
As of this writing, the BTC price is around $68,330, up almost 1% in the last 24 hours. However, this mild daily action will do little to correct the more than 2% price decline witnessed by the top cryptocurrency over the past week. Bitcoin price is currently down more than 45% from its all-time high, according to data from CoinGecko.
The price of BTC on the daily timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
editing process for focuses on providing thoroughly researched, accurate, and unbiased content. We adhere to strict sourcing standards, and each page is diligently reviewed by our team of leading technology experts and seasoned editors. This process ensures the integrity, relevance, and value of the content for readers.
