Darkfost
Bitcoin's range narrows between active supply support and capital break-even resistance
For now, BTC continues trading above the key active supply cost basis level. This is a cost basis calculation where the oldest BTC have been deliberately excluded, keeping only the coins that are genuinely circulating in the market. This yields a cost basis of $71 300, which is acting as a significant support level. At the end of the 2023 bear market, this same level was tested twice before the cycle properly launched. It's a level where a market reaction can reasonably be expected, since it represents the average cost basis of active market participants, investors who will likely defend their break-even point. On the other hand, when we shift approach and look at the cost basis of invested capital, we find a resistance level that BTC has so far failed to break through. At $79 800, Bitcoin continues to get rejected. This is explained by the fact that this level marks the point at which a portion of capital currently sitting at a loss returns to break-even. Investors are taking the opportunity to exit, either to limit losses or to lock in quick profits for those who entered more recently. Back in 2023, as it approaches the invested capital cost basis zone BTC got rejected twice before it was finally able to launch a new cycle, it's a somewhat similar setup to what we're currently observing. We therefore have a range attempting to establish itself between these two levels, and each time BTC approaches either boundary, market reactions should be expected.