Latest data from Glassnode reveals that around 14% of the Bitcoin supply has been redistributed since the July of this year.
14% Of The Total Bitcoin Supply Has Changed Hands Since July 2022
As per the latest weekly report from Glassnode, around 20.1% of the supply now has a cost-basis in the historical bottom formation range.
During a Bitcoin bottom discovery phase, the diminishing investor profitability leads to the weaker hands undergoing a capitulation event, which results in a redistribution of coins taking place in the market.
In the past cycles, such a phase has started with the crypto dipping below the “realized price,” and has lasted while the crypto has ranged between this level and the “balanced price.”
The former is a price model that signifies the cost-basis of the average investor in the market, while the latter (the balanced price) is a “fair-value” model for the crypto.
Now, here is a chart that shows how the coin distribution in the Bitcoin market looked like at the start of the current bottom formation phase:
6.1% of the total supply was acquired within the range | Source: Glassnode's The Week Onchain - Week 44, 2022
As you can see in the above graph, before the bottom discovery started, around 6.1% of the total supply had its cost-basis between the realized price and the balanced price levels.
After Bitcoin dipped below the realized price and the bottom phase started, however, coins naturally started changing hands at these levels. Following this redistribution, this is how the market looks like:
The new distribution following the bottom discovery phase | Source: Glassnode's The Week Onchain - Week 44, 2022
20.1% of the total supply now has its cost-basis inside this range, implying that there has been a coin wealth redistribution of around 14% since the month of July.
But how does this redistribution compare with the previous cycle? At the start of the 2018-19 bottom discovery phase, around 7.65% of the total supply had its cost-basis within the range.
By the end of the bottom discovery phase (which was when the coin exited above the realized price), the wealth distribution looked like this:
The end of the 2018-19 bottom formation phase | Source: Glassnode's The Week Onchain - Week 44, 2022
From the graph, it’s apparent that 30.36% of the supply was within the range at the end, implying that 22.7% of the coins changed hands in this period.
Clearly, the current cycle hasn’t seen redistribution on this level yet. The report notes that this could suggest the market may need to see further consolidation before a bear market floor is fully formed.
At the time of writing, Bitcoin’s price floats around $20.5k, up 7% in the last week.
BTC continues to stay above $20k | Source: BTCUSD on TradingView
Featured image from Dmitry Demidko on Unsplash.com, charts from TradingView.com, Glassnode.com