On-chain data shows that Bitcoin traders who bought during the 2021 bull run are finally getting close to breaking even after the latest price spike.
Bitcoin Diamond holdings since 2021 bull run are close to breaking even
As CryptoQuant founder and CEO Ki Young Ju explains in a new report postal On Day X, cryptocurrency prices finally approached the cost basis of 2021 bull market buyers.
The relevant on-chain metric here is “actual price,” which tracks the price at which average investors in the industry buy Bitcoin.
When the spot price of an asset is higher than this indicator, it means that it is now profitable for holders to hold their tokens. On the other hand, prices below this indicator mean that the entire market is in the red.
Of course, the actual price was exactly equal to the spot price, suggesting that the average holder could consider their investment to be just breaking even.
In the context of the current theme, what we are interested in is not the actual price of the entire market, but those who bought during the 2021 bull market.
They are roughly Bitcoin holders in the 2 to 3 year UTXO age range. Simply put, “UTXO age range” refers to a group of tokens (specifically, unspent transaction outputs, or UTXOs) divided by age.
The 2- to 3-year-old range corresponds to the years between February 2021 and February 2022, roughly the time of the last bull market. Now, the chart below specifically shows the realized price trends for these BTC investors:
Looks like the price of the asset has been approaching this level in recent days | Source: @ki_young_ju on X
As shown in the chart above, the Bitcoin realized price for the 2- to 3-year UTXO age range has recently been floating around $49,340. When Ju shared the chart, BTC was trading at $48,300, which means the asset is approaching the cost basis of these investors.
However, Bitcoin has experienced a strong surge since then, which means it has now broken above this level. This suggests that investors who bought during the 2021 bull rally ended up profiting en masse.
Most bull market buyers are bound to capitulate in the ensuing bear market, but the few investors who decide to hold on and take huge losses will eventually be rewarded with diamond hands.
These bull buyers won’t get any major gains, but they won’t complain because after years of waiting, they’re now at least out of the woods.
Following a strong surge over the past day, Bitcoin briefly touched the $50,000 level for the first time since December 2021.
The price of the asset has rocketed up today | Source: BTCUSD on TradingView
Featured image by André François McKenzie on Unsplash.com, charts from TradingView.com, CryptoQuant.com