U.S. spot Bitcoin ETF investors find themselves in a challenging position, with many currently holding assets below their purchase price. As Bitcoin's price navigates recent dips, critical support levels derived from the average cost basis of these ETFs are emerging as key indicators for the cryptocurrency's near-term trajectory.
ETF Holders Underwater and Critical Support
Recent market activity has left U.S. spot Bitcoin ETF buyers in a deficit, with an average cost basis for all ETF holders since 2024 reported at $90.2K. With Bitcoin's price recently dipping to $82.3K, these investors are facing losses of approximately 8.5%. This puts the market at a pivotal moment, with the combined average purchase price for both Strategy and spot BTC ETFs now identified at $84.5K. This specific level is crucial, as historical data suggests that major drawdowns in this cycle have consistently found significant support around this mark.
Historical Precedent and Path to Recovery
Analysis of past market behavior reveals a compelling pattern: when Bitcoin's price has fallen below the ETF average purchase level in previous instances, it has often consolidated around that point before staging a robust recovery. This historical resilience around the average cost basis suggests a potential for a similar rebound if the current trend mirrors these earlier periods. However, a sustained dip below the $84.5K support level would be a concerning signal, potentially indicating a deeper market correction that could challenge the broader bullish market structure. For a recovery to solidify, a crucial factor will be the return of ETFs to a net-buyer status, especially given that Bitcoin demand growth has recently turned negative.
