Bitcoin, the leading cryptocurrency, had been trading sideways for some time, but recent market developments increased selling pressure. The price of $BTC fell to levels around $82,000.
At this point, activity in US government-linked wallets and tensions around the Strait of Hormuz pushed oil prices above $100, putting pressure on global risk appetite and increasing selling pressure on Bitcoin, resulting in a sudden price drop.
As discussions continue in the market about whether the decline in Bitcoin’s price will continue, critical price levels have come to the forefront.
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At this point, the cost levels of institutional investors in Bitcoin point to one of the most critical support zones for the price.
The Costs of Two Major Corporate Groups Are Very Close: All Eyes on $77,000-$79,000!
Joao Wedson, CEO of analytics company Alphractal, analyzed the average cost of $BTC for institutional investors.
According to the data, the total Bitcoin holdings of US spot Bitcoin ETFs and publicly traded companies have reached 2.57 million $BTC, with a significant portion of these assets held at costs close to the $77,000-$79,000 range. Therefore, maintaining the $77,000-$79,000 region is crucial for institutional investors to keep their positions profitable.
“US spot ETFs: 1.29M $BTC, average cost $76,909
Publicly traded companies: 1.28M $BTC, average cost $78,834”
In total: 2.57M $BTC, almost 13% of the supply, purchased at almost the same price.
Billions of Dollars in Profits When Bitcoin Was at $83,000!
In a scenario where Bitcoin is at $83,200, ETF investors’ MVRV ratio is 1.08x, with unrealized profits of approximately $8.1 billion; while publicly traded companies’ MVRV ratio is 1.06x, with unrealized profits of approximately $5.6 billion.
According to Wedson, in price breakdowns below $83,000, the iShares Bitcoin Trust (IBIT) costs $81,277, treasury companies cost $79,782, Strategy (MSTR) costs $75,441, public miners cost $69,498, and private companies cost $33,789.
Critical Area Tested Before!
Another point Wedson highlighted in his post was what happened when Bitcoin previously fell to $58,500. According to the analyst, although the average ETF investor’s position dropped by approximately 24 percent during this period, a mass capitulation did not occur.
Therefore, Bitcoin remaining above $77,000-$79,000 could help limit selling pressure by allowing a significant portion of institutional investors to remain profitable.
Conversely, losing this area could cause approximately 2.57 million $BTC of institutional positions to revert to losses, increasing selling pressure in the market.
*This is not investment advice.
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