Bitcoin's 95% Supply Cost Basis: A Critical Market Pivot → Insights

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Briefing

Bitcoin’s price maintaining above the 95% supply cost basis is crucial for continued upward momentum. This suggests the market is at a critical juncture, where this on-chain support level will dictate whether demand strengthens or selling pressure emerges. Bitcoin trades above the $115.2k cost basis of 95% of its supply.

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Context

Is Bitcoin’s recent rally sustainable, or are we facing a potential reversal? What specific on-chain indicators can confirm the market’s underlying strength or weakness?

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Analysis

The Supply Quantiles Cost Basis, specifically the 95% quantile, identifies the average price at which 95% of the circulating Bitcoin supply was last moved. This metric acts as a significant on-chain support or resistance level, reflecting the aggregate acquisition price of a large portion of the market. When the price is above this cost basis, it suggests a large majority of holders are in profit, often indicating a healthy market with potential for continued demand. A drop below this level can signal widespread unrealized losses, potentially leading to increased selling pressure and a market contraction.

Following a recent rally, Bitcoin’s price has risen above the $115.2k cost basis of 95% of its supply. This indicates that nearly all Bitcoin holders are currently in profit. This pattern suggests that demand has been strong enough to push the market past a significant aggregate acquisition price, establishing a new floor. This positioning above a critical cost basis implies that continued stability at or above this $115.2k level is essential.

It validates demand-side momentum. A failure to hold this level would mean a significant portion of the market moves back into unrealized loss, increasing the likelihood of further price declines as conviction weakens.

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Parameters

Key Metric – Supply Quantiles Cost Basis (95% quantile) → The average price at which 95% of Bitcoin’s supply last moved.
Observed Pattern – Bitcoin trading above $115.2k → Price has risen above the 95% supply cost basis after a rally.
Critical Support Level – $115.2k → The current price of the 95% supply cost basis.
Downside Risk Level – $105.5k → $115.2k range → The range Bitcoin risks contracting into if the $115.2k support is lost.
Analysis Timeframe – Post-September 17 FOMC meeting → The period examined for market dynamics and on-chain indicators.

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Outlook

The market’s near-term future hinges on Bitcoin’s ability to sustain its price above the $115.2k cost basis. Continued stability here could pave the way for further upside, as it reinforces investor confidence and demand. A confirming signal to watch would be a sustained increase in spot buying volume, indicating genuine demand absorbing any selling pressure. A clear counter-signal would be a significant drop below $115.2k, especially if accompanied by increased exchange inflows, signaling profit-taking or capitulation.

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Verdict

Bitcoin’s current price above the 95% supply cost basis establishes a critical on-chain support that will determine its immediate market trajectory.

Signal Acquired from → glassnode.com