Bitcoin Breaks Above Single Cycle HODLers Cost Basis
In a recent analysis, it has been noted that Bitcoin has broken a significant level known as the cost basis of single-cycle long-term holders. Let’s break down what this means.
Understanding Long-Term Holders
Long-term holders (LTHs) are investors who have held onto their Bitcoin for at least 155 days. These are typically the steadfast HODLers who rarely sell, even during market volatility.
Single Cycle HODLers
Within the group of long-term holders, there are single cycle HODLers. These are LTHs who bought their Bitcoin within a specific BTC cycle, which usually ranges from 6 months to 3 years. This means they have experienced both the highs and lows of the current market cycle.
The Significance of Cost Basis
Cost basis refers to the average buying price of a group of Bitcoin investors. If the current spot price is below this value, it indicates a net loss for that cohort. Conversely, if the price is above the cost basis, it suggests profitability.
A chart depicting the trend in cost basis for single-cycle long-term holders over the years shows that April 2019 also witnessed a break in this level, resulting in a 99% gain for Bitcoin.
If history repeats itself and breaking above the single-cycle HODLer cost basis leads to a rally, we may see another surge in Bitcoin’s price.
BTC Price Update
In recent weeks, Bitcoin has remained relatively stable, with only a 2% increase in value. The current price hovers above $35,200.
Hot Take: Potential for a Moderate Rally
Based on the similarities between the current Bitcoin rally and the recovery rally of April 2019, it is possible that any surge in price will align more closely with the 2019 rally rather than a full-blown bull run.
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