Bitcoin Holders Continue to Shrug Off Macro Data

The cost basis for bitcoin has fallen and bitcoin holders appear to be feeling less pain.

AccessTimeIconNov 3, 2022 at 7:50 p.m. UTC
Updated Nov 4, 2022 at 6:17 p.m. UTC
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Hawkish monetary policy and macroeconomic uncertainty rage on.

But crypto investors ultimately have little else on their mind than cost basis. On a quiet trading day that saw bitcoin and ether sink slightly, and the Bank of England deliver the latest, global interest rate body blow – its highest increase in 33 years – investors continued to focus almost exclusively on how much they paid for an asset.

To be sure, macro data remains important as cryptocurrencies react increasingly to the same stimuli that have affected other assets for decades. Jobs and productivity reports, energy prices and Russia’s unprovoked invasion of Ukraine, for example, have all jarred markets over the past year.

However, crypto investors have grown increasingly adept at pricing in such events and others, and are less likely to be caught off guard, which accounts for bitcoin’s lack of major movement in recent months.

On Thursday, bitcoin was trading at almost exactly the same mark it held in mid-June, undisturbed by the Federal Reserve’s fourth consecutive jumbo rate increase, GDP declines, hawkish remarks from Chair Jerome Powell and socio-political turmoil.

Through four consecutive 75 basis point rate increases, the largest cryptocurrency by market capitalization has formed a base that, depending on the week, has hovered over $19,000 or $20,000 since mid-June. This broad threshold will likely serve as support moving forward.

The world turns but the asset often criticized for its volatility has not – or certainly not as much as leading equity indexes this year.

Bitcoin’s relative strength

Bitcoin’s relative strength index (RSI) is currently 56, which is only slightly above neutral, and bitcoin’s price is within 2% of its 20-day moving average.

Much of the pain from 2022’s price declines appears to have already flushed through the market.

Glassnode’s UTXO Realized Price Distribution (URPD) graphic highlights a spike in BTC acquired near the $20,000 price point.

Bitcoin UTXO Realized Price Distribution (Glassnode)
Bitcoin UTXO Realized Price Distribution (Glassnode)

This trend highlights a resetting of cost basis as bitcoin holders who purchased at higher levels exited their positions to alleviate financial distress.

By contrast, newer investors entered into long positions between $19,000 and $21,000 but have not been impacted to the same extent.

This trend also coincides nicely with the Volume Profile Visible Range (VPVR) tool, indicating high volume nodes at $19,200 and $20,300. A high volume node refers to an area of significant price agreement and can often serve as support for an asset.


Ultimately, despite the macro headwinds that have been roiling financial markets, crypto holders appear to have already shed much of their pain.


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Glenn Williams

Glenn C Williams Jr, CMT is a Crypto Markets Analyst with an initial background in traditional finance. His experience includes research and analysis of individual cryptocurrencies, defi protocols, and crypto-based funds. He owns BTC, ETH, UNI, DOT, MATIC, and AVAX

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