Analysis: Bitcoin faces a huge "supply gap" in the $70,000 to $80,000 range. If it falls below $80,000, the decline may accelerate

ChainCatcher reports that during the rapid rise of Bitcoin prices in November last year, a supply gap was created within the range of 70,000 to 80,000 US dollars. According to Glassnode data, about 20% of Bitcoin's current supply is at a loss.

If Bitcoin's current price falls below $80,000 it could accelerate its decline. The UTXO Realized Price Distribution (URPD) chart by Glassnode shows what is referred to as a "supply gap". This indicator tracks the price point when existing Bitcoin UTXOs were last moved. Each bar represents the quantity of Bitcoins traded for the last time within a specific price range. The data has been entity-adjusted which means an average purchase price is assigned for each entity and all their balances are classified accordingly.

In layman terms, the total number of traders who bought Bitcoin in the $70k-$80k range may be far lower than other price ranges. Therefore if prices fall below $80k there might be few holders willing to buy more at their cost basis; hence there would be almost no support above March 2024’s historical high point of $73k.