Bitcoin Price Nears Key Support Level, Mirroring Early 2022 Patterns

• Bitcoin price stability: Trading just above the True Market Mean, with over 25% of supply underwater, yet net realized cap change remains positive at +$8.69B monthly.

• Derivatives market reset: Futures open interest and leverage have declined, with funding rates neutral, reducing downside pressure from overextended positions.

• ETF outflows impact: U.S. Bitcoin ETFs saw net outflows in November, signaling lighter spot demand and increased exposure to macro shocks, per Glassnode data.

Discover how the Bitcoin True Market Mean is holding as a key support amid recent declines. Explore ETF flows, derivatives resets, and investor signals in this in-depth analysis for informed crypto strategies.

What is the Bitcoin True Market Mean?

The Bitcoin True Market Mean is a key on-chain metric that calculates the average acquisition cost of all actively held Bitcoin addresses, excluding those associated with miners to focus on genuine holder behavior. According to Glassnode, this level acts as a pivotal threshold, distinguishing mild bearish phases from severe downturns. Currently, with Bitcoin’s spot price hovering near $96.1K, the metric highlights a support zone where price has consolidated after a two-week slide, preventing a deeper capitulation similar to past cycles.

How Are Bitcoin ETF Outflows Affecting Current Market Dynamics?

U.S. Bitcoin ETFs, which drove significant inflows earlier in the year, have shifted to net outflows on a three-day average basis throughout November, according to Glassnode insights. This reversal indicates waning institutional demand, leaving Bitcoin’s price more vulnerable to external macroeconomic pressures like interest rate decisions or global events. Short sentences underscore the shift: spot demand has lightened, with cumulative volume delta turning negative on major exchanges such as Binance and Coinbase.

Supporting data reveals that over 25% of Bitcoin’s total supply is now underwater below the 0.75 supply quantile, a level breached in mid-November. This underwater supply metric, while concerning, has not yet escalated to the 30% threshold seen in prolonged bears. Glassnode reports that the net change in realized capitalization stands at a modest +$8.69 billion per month, down sharply from the $64.3 billion peak in July but still positive, suggesting accumulation rather than mass liquidation.

Long-term holders continue to realize profits at a controlled rate, with the 30-day simple moving average of their spent output profit ratio (SOPR) at 1.43, indicating sales into strength but with diminishing intensity. Expert analysis from on-chain observers points to this as a stabilizing factor, allowing price to potentially form a base if the True Market Mean holds.

Derivatives markets reinforce this cautious outlook. Futures open interest has steadily declined through late November, unwinding leverage built during the prior uptrend in an orderly fashion. Funding rates have cooled to near zero after prolonged positive periods, with brief negative readings that did not persist, showing balanced positioning without aggressive short-selling.

In the options arena, implied volatility has eased following a recent spike. Short-dated volatility dropped from 57% to 48%, mid-tenor from 52% to 45%, and long-dated from 49% to 47%, reflecting reduced fear after Bitcoin’s rebound from $84.5K lows triggered by Japanese bond market turbulence. Short-term skew fell from 18.6% to 8.4%, while traders initially bought puts amid carry-trade unwind concerns before shifting to calls during stabilization.

At the $100K call strike, sold call premiums outpace bought ones, with the gap widening in the last 48 hours, underscoring hesitation to push toward six figures ahead of the FOMC meeting. Crypto entrepreneur Lark Davis noted, “Crypto whales dumped the market, then Charles Schwab, Vanguard and Bank of America all roll out crypto to their clients in the same week. What a happy coincidence!” This highlights ironic timing in institutional adoption amid retail and whale profit-taking.

The 0.85 supply quantile at $106.2K remains a decisive resistance; until reclaimed, macro factors will dominate price trajectory. Sellers appear fatigued, with price structure mirroring Q1 2022 tick-for-tick, where support held initially before broader pressures tested it further.

Frequently Asked Questions

What does it mean for Bitcoin when 25% of supply is underwater at the True Market Mean?

When 25% of Bitcoin’s supply trades underwater relative to the True Market Mean near $96.1K, it signals heightened selling pressure from short-term holders realizing losses, but the sub-30% level avoids full bear market territory, per Glassnode metrics. Investors should watch for stabilization above this support to gauge recovery potential, as long-term holders are not capitulating en masse.

Is Bitcoin’s price likely to build a base above the True Market Mean right now?

Yes, Bitcoin’s price shows signs of base-building above the True Market Mean, with positive net realized cap change and neutral derivatives positioning providing a floor. While ETF outflows and macro risks persist, the current hold above $96.1K, combined with fading leverage, suggests consolidation rather than breakdown, making it a zone worth monitoring for upward momentum.

Key Takeaways

• True Market Mean as support: Bitcoin’s hold above $96.1K differentiates this from deeper bears, with structure akin to early 2022.
• ETF and spot demand shift: November outflows and negative volume delta indicate thinner bids, exposing price to external shocks.
• Derivatives de-risking: Declining open interest and cooling volatility point to orderly reset, reducing tail risks for investors.

Conclusion

In summary, the Bitcoin True Market Mean at approximately $96.1K has emerged as a respected support level, with price action holding firm despite two weeks of declines and over 25% underwater supply. Bitcoin ETF outflows and derivatives resets underscore a market in consolidation, bolstered by positive realized cap growth from Glassnode data. As institutional platforms like Charles Schwab expand crypto access, forward momentum may build if macro conditions stabilize—stay vigilant for breaks above $106.2K to confirm bullish reversal.