The head of research at on-chain analytics firm CryptoQuant explained why selling pressure from Bitcoin traders could decrease.
Bitcoin Short-Term Holder Realized Price Rises to $60,000
In a new job on “Short-term holders” (STH) refer to Bitcoin investors who have held their coins for less than 155 days.
STHs include market “traders” who make many moves in short periods of time and do not tend to HODL their coins. This group can be very reactive to market movements, easily panic selling whenever a crash or rally takes place.
In general, profit investors are more likely to sell their coins, so one way to determine whether STH would be likely to participate in a sell-off is to use their profit/loss margin.
Here, Moreno cited the profit/loss margin of this cohort based on its realized price.
The realized price of the group appears to have been going up in recent weeks | Source: @jjcmoreno on X
The price realized by STH (highlighted in pink) here refers to the average cost basis or acquisition price of investors in this cohort, calculated using blockchain transaction history.
When the cryptocurrency's spot value is above this level, it means that these holders as a whole currently have some net profits. On the other hand, the price being below the metric implies the predominance of losses.
From the chart above, it is visible that Bitcoin has been outperforming the price STH has achieved over the past few months, meaning these traders have made profits.
This is typical of bull markets, as the price continues to rise, allowing these investors to make profits. Although STH tends to stay in the green during these periods, highs become likely if these profits become extreme.
As the chart shows, the profit/loss margin reached significant levels just as BTC reached its latest all-time high, which continues to be the high until now.
Recently, as Bitcoin consolidated between $60,000 and $70,000, the realized price of STH increased rapidly, now reaching a value of around $60,000. This is because, as STHs trade in this range, their acquisition prices have been revalued to these higher levels, thus pushing up the average.
BTC has been quite close to this level recently, so STHs would not be making as much profit currently. “Bitcoin selling pressure from traders could decrease, as unrealized profit margins are now virtually zero,” notes the CryptoQuant official.
BTC Price
Bitcoin continued to show action contained within its recent range, with its price still trading around $65,200.
Looks like the price of the asset has rebounded in the past day | Source: BTCUSD on TradingView
Featured image of Kanchanara on Unsplash.com, CryptoQuant.com, chart from TradingView.com
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