In the volatile world of cryptocurrency, Bitcoin’s latest price action has ignited concerns among investors. According to on-chain analytics firm Glassnode, BTC has slipped below its 0.75 supply quantile since mid-November, leaving over 25% of the circulating supply in unrealized loss territory. At around $93,000, the market is caught in a tense standoff—balancing the threat of further seller capitulation against the potential for exhaustion-driven reversal. This setup echoes the fragility seen in early 2022, when similar underwater supply levels preceded a prolonged bear market.
Inside the Supply Quantiles Model: Why These Levels Matter
The Supply Quantiles Cost Basis Model, a key metric from Glassnode, tracks the distribution of Bitcoin’s realized cost basis across holder cohorts. It divides the supply into quantiles based on the average acquisition price of coins. The 0.75 quantile represents the cost basis for the top 25% of holders (those who bought at higher prices), while the 0.85 marks an even steeper threshold. When BTC price falls below these lines, it signals widespread pain for recent buyers, often amplifying downside pressure as leveraged positions unwind. Current data paints a picture of weakening demand.
Weakening Demand and Macro Stress Amplify Downside Pressure
ETF inflows have tapered, spot market volumes are subdued, and futures open interest shows cautious positioning. Options markets reflect compressed volatility, suggesting traders are bracing for shocks rather than betting on upside. Macro headwinds, including potential U.S. policy shifts and global economic uncertainty, add to the sensitivity. A breach below key supports like $88,000–$90,000 could trigger a cascade toward $75,000–$80,000, reminiscent of 2022’s capitulation lows. Yet, history offers glimmers of hope. Past instances of high underwater supply have often marked local bottoms, where forced selling exhausts itself, paving the way for accumulation.
Historical Patterns Show Underwater Supply Can Mark Bottoms
Reclaiming the 0.75 quantile at $95,800 would alleviate immediate pressure, while pushing past $106,200 (0.85 quantile) could restore bullish conviction. On-chain indicators like rising RSI divergences and stealthy OBV upticks hint at underlying strength, but conviction requires volume-backed breakouts. For long-term holders, this dip tests resolve. Bitcoin’s cycle dynamics suggest resilience, with institutional adoption and halving aftereffects still in play. The path to $110,000–$115,000 by year-end remains viable if supports hold, potentially extending to $150,000 in the broader bull run. Investors should monitor quantile reclaims closely—failure risks deeper pain, but success could ignite FOMO-fueled recovery. In crypto’s high-stakes game, data like Glassnode’s reminds us: patience amid fragility often rewards the steadfast.