The profit cushion for holders of coins less than six months old narrowed from 8.7% to 5.9% over the past week. Meanwhile, their average purchase price is rising, while that of older coins is barely changing. The gap between the two groups is widening.
TL;DR
Young coins remain in profit, but the cushion is getting thinner. A look at how the price compares with new buyers' cost basis and why their cost basis is pulling away from that of older holders.
Bitcoin Young Realized Price 6M
As of October 25, bitcoin is trading at $80.5K, while the average purchase price of coins less than six months old is $76.0K. Over the past week, the profit cushion narrowed from 8.7% to 5.9%, bitcoin fell by $1K, and the average purchase price rose by $1.1K. The price has remained above this level since August 20.
If bitcoin falls below $76.0K, this group will move into a loss. The last time that happened was in mid-August.
Bitcoin Young/Old Ratio
The average purchase price of young coins is 1.56 times that of coins older than six months: $76.0K versus $48.6K. The ratio has been rising since its mid-August low of 1.36, increasing from 1.54 to 1.56 over the past week, and remains above its moving average. The cost basis of older coins is barely changing, so the rise in the ratio is driven by the increasing cost basis of young coins.
On September 17, the ratio's 30-day moving average crossed above its 90-day moving average. Similar crossovers following prolonged declines in the Young/Old Ratio marked the end of downturns in May 2019 and February 2023.
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FAQ
Does a rising ratio mean new capital is flowing in? It shows that coins less than six months old were purchased at higher prices than before.
If bitcoin is above $76.0K, are all new buyers in profit? Those who bought above the current price, for example in late September, are still at a loss. The average purchase price does not show each holder's individual return.
Conclusions
Bitcoin remains above the average purchase price of young coins, but their profit cushion narrowed to 6% over the past week. Renewed price growth would increase that cushion. The main risk is a drop below $76.0K. This would mean that coins purchased over the past six months would be held at a loss.
Live Charts
Explore the metrics behind this brief with live, auto-updating charts:
Realized Price - Aggregate on-chain cost basis compared with BTC price and long-term trend.
RHODL Ratio - Ratio of younger to older HODL bands to flag cycle tops and overheated demand.
LTH vs STH Supply - Supply split between long- and short-term holders to track accumulation and distribution.
STH-SOPR - Short-term holder profit/loss behavior around the 1.0 breakeven threshold.