Upper-Half Cost Basis Overhang

What is it?

Coins bought at high prices do not disappear when the price falls. They sit in wallets, held by people who paid more than the current quote, and those people decide what happens to that supply. This chart estimates how many coins were acquired above the midpoint of the last four years' price range, and how fast that stock is draining. The measurement works by inverting the distribution of acquisition prices. For any given day, the chain tells us what price the cheapest ten percent of the supply was bought at, the cheapest twenty percent, and so on across nineteen levels. Reading that curve backwards converts a price threshold into a share of supply, which is how a question about price becomes an answer about quantity. Unlike a cohort measure, this reads the entire holder base rather than a slice of it. A coin bought high two months ago and a coin bought high two years ago both count, because what matters here is the price paid, not the date.

How to read

The plotted line is the estimated stock in bitcoin, and it is the only series on the axis: mixing a percentage and a dollar threshold onto one scale would flatten both against zero. It rises when coins are acquired above the threshold, and falls when those coins change hands and their acquisition price is rewritten at a lower level. The share of supply, the threshold and the drain rate are carried in the tooltip, and the share is the one to read when comparing across years, since total supply itself grows. The threshold moves with the four-year price range, so it rises after a sustained advance and falls as an old high leaves the window. This is deliberate: the question being asked is always about the recent range, not about a fixed price that would become meaningless over a decade. The drain rate is the thirty-day change expressed per day. Negative values mean the stock is emptying, which happens when coins bought high finally move. Sustained draining and a stock that holds steady describe very different situations, and the rate makes the difference visible without needing to measure the slope by eye. Overlaying the BTC price shows the mechanism directly: the stock builds during advances and drains during the periods that follow.

Key zones

The share of supply is the more useful of the two readings, since it is comparable across the whole history while the absolute figure grows with the network. Over the available record, the share has ranged from under a tenth of the supply to nearly half. High readings follow sustained advances, when a large number of coins changed hands at elevated prices. Low readings follow long declines, when that supply has already been redistributed downward. What the level does not tell you is what happens next. A large stock means a large group holds coins bought above the threshold; it says nothing about whether they intend to sell. The drain rate is closer to a behavioural reading than the level itself, because it measures what those holders are actually doing rather than what position they are in.

What to observe

• The drain rate rather than the level alone. A large stock that is not moving and a large stock emptying steadily are different situations. • Whether the stock drains while price is flat. That means coins bought high are being absorbed without requiring a further price concession. • The share of supply rather than the coin count when comparing across years, since the network has grown substantially over the record. • Where the threshold line sits relative to the current price. A threshold far above the market means the stock consists of positions deeply underwater; a threshold near the market means the boundary is close to the current quote. • The relationship with loss volume. Draining stock accompanied by rising loss volume is a cohort selling at a loss; draining stock without it suggests coins moving for other reasons. • Turning points. The stock stops building when acquisitions above the threshold stop, which happens before the drain begins.

Historical context

The anchor for the threshold was chosen by measurement rather than by intuition, and the reasoning is worth stating because it changed the design. Narrower definitions were tested first, including the upper fifteen percent of the four-year advance, which sounds like the more compelling category: the people who bought right at the top. The problem is that very few coins are acquired at the very top, so that threshold falls outside the measurable range of the percentile curve most of the time. A chart built on it would have shown a flat line pinned to the edge of what can be measured for the majority of its history, and that flat line would have overstated the true figure rather than merely omitting it. Seven candidate anchors were evaluated over the full record. The midpoint of the four-year range is the only one that never falls outside the measurable range, while still varying widely enough to be informative. It describes a broader group than the narrow definitions, which is precisely why it can be measured everywhere. The four-year window is chosen to match the approximate length of a full cycle, and it slides, so no fixed historical price ever anchors the threshold permanently.

Expert notes

The percentile curve advances in steps of five percent of supply, so the estimate is precise to roughly that granularity. Between two adjacent levels the conversion is linear, which is an approximation: the true distribution within an interval is not exactly linear. The error this introduces is small relative to the movements the chart is used to read, but it is real and it is the reason this is described as an estimate rather than a count. Beyond the outermost measured level, no extrapolation is performed. If a threshold ever fell outside the curve, the value would be capped and flagged rather than projected, because the shape of the distribution beyond the last measured point is genuinely unknown and inventing it would produce a number that looks like a measurement without being one. With the chosen anchor this never occurs over the available history, and the mechanism remains as a safeguard rather than an active behaviour. The window bounds are computed from trailing data only, so no future price influences a past reading. This matters because using the eventual high of a cycle to define its own threshold would make every historical reading depend on information unavailable at the time.

Common mistakes to avoid

• Reading the stock as sell pressure. It measures a position, not an intention. Holders above the threshold may sell, may hold indefinitely, or may buy more. • Treating the estimate as an exact count. The percentile grid limits the resolution, and the figure should be read at the scale of its movements rather than to the last coin. • Expecting the threshold to stay put. It follows a sliding four-year range and moves as old extremes leave the window. • Comparing coin counts across distant years without looking at the share of supply. The network has grown substantially and absolute figures are not comparable on their own. • Assuming a falling stock is bullish. Coins leaving the group can mean absorption by patient buyers, or holders giving up, and the level alone does not distinguish them. • Confusing this with a measure of unrealised loss. The threshold is anchored to the price range, not to the current price, so the stock can be large while much of it sits in profit.

Programmatic access

REST API

curl -sS \
  'https://api.trinityinsights.io/api/v1/cycle-intelligence/metrics/cycle-upper-half-overhang/data?timeframe=90d' \
  -H 'X-API-Key: $TRINITY_API_KEY'

MCP server

{
  "tool": "get_chart_value",
  "metric_id": "cycle-upper-half-overhang",
  "timeframe": "1y"
}

Required tier: pro. See the pricing grid for the tier list and the MCP documentation for multi-client configuration.

Related metrics

• cycle-loss-volume-btc
• cycle-cost-basis-regime-map
• cost-basis-distribution
• elastic-profit-supply
• realized-price-percentiles

Institutional disclaimer

Trinity Insights is an educational and analytical tool. The metric above does not constitute investment advice. Trinity Insights is not a Crypto-Asset Service Provider (CASP) registered under MiCA Regulation (EU) 2023/1114. See the full disclaimer.