For now, BTC continues trading above the key active supply cost basis level.

This is a cost basis calculation where the oldest BTC have been deliberately excluded, keeping only the coins that are genuinely circulating in the market. This yields a cost basis of $71 300, which is acting as a significant support level.

At the end of the 2023 bear market, this same level was tested twice before the cycle properly launched. It's a level where a market reaction can reasonably be expected, since it represents the average cost basis of active market participants, investors who will likely defend their break-even point.

On the other hand, when we shift approach and look at the cost basis of invested capital, we find a resistance level that BTC has so far failed to break through. At $79 800, Bitcoin continues to get rejected.

This is explained by the fact that this level marks the point at which a portion of capital currently sitting at a loss returns to break-even. Investors are taking the opportunity to exit, either to limit losses or to lock in quick profits for those who entered more recently.

We therefore have a range attempting to establish itself between these two levels, and each time BTC approaches either boundary, market reactions should be expected.

Written by Darkfost