Bitcoin repeats key bear market move as $19K becomes key BTC price zone

Bitcoin (BTC) at $19,000 could be more important than traders believe, new data shows.

In the latest installment of its monthly report series, The Bitcoin Monthly, investment management firm ARK Invest pointed to an ongoing battle to defend Bitcoin’s investor cost base.

Bitcoin Investor Cost Base Boosts Market

Bitcoin price action is currently characterized by volatile movements within a well-defined range of only around $4,000.

This range has been holding since June and includes what immediately catches the eye: the previous halving cycle’s all-time high of $20,000.

However, with BTC/USD crossing this threshold frequently, traders have long searched for alternative lines in the sand when it comes to new trends for the pair.

For ARK and the report’s guest author, William Clemente, co-founder of Reflexivity Research, it’s $19,000 that could act as important support.

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This is due to what is known as bitcoin’s investor cost basis – the total price at which the BTC supply was purchased, minus the share owned by the miners.

“Throughout most of September, Bitcoin traded between two key historical levels: its 200-week moving average ($23,500) as resistance and its investor cost base as support ($19,000),” ARK stated.

BTC price is now at $19,000, the level that would cause significant losses across Bitcoin’s investor base if breached.

“As strong holder behavior battles against a weak macro environment, resolution on both sides will play a significant role in Bitcoin’s near-to-intermediate-term performance,” the report adds.

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Bitcoin 200-week moving average vs. base chart of the cost to investors (screenshot). Source: ARK Invest

As Cointelegraph reported this week, analysts are closely monitoring the overall portion of supply that is currently held at a loss.

In previous bear markets, this has always exceeded 60% before hitting a price bottom, leading them to conclude that the market will continue to fall in 2022.

Investor cohorts reflect 2018 behavior

More numbers covering long-term holders (LTHs) losses paint a similar picture in mid-September – BTC price action could target $14,000 before mirroring previous bear market lows.

Related: Bitcoin still has target of $14,000, trader warns as DXY due to ‘parabolic’ pause

ARK went on to note that the cost base of LTHs and short-term holders (STHs) broke for the first time since 2018 — the year it hit the macro bottom of $3,100 at the end of the fourth quarter.

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An STH is defined as an entity holding BTC for up to 155 days, with LTHs making investments for longer periods.

“The short-term holder (STH) cost basis has undershot the long-term holder (LTH) cost basis, a signal that usually correlates with high-conviction market bottoms,” the report commented.

“Likely a sign of minor speculative excesses, this cross suggests that short-term holders have capitulated or are aging into long-term holders.”

Bitcoin LTH and STH cost basis chart (screenshot). Source: ARK Invest

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