On-chain data shows that bitcoin failed its latest retest of a historically significant metric, a sign that a bearish trend may have taken control.
bitcoin has been rejected from the short-term holder’s cost base
As one analyst noted in a mail At X, btc is currently facing resistance in the short-term holder’s realized price. The “realized price” here refers to the average investor’s cost basis or acquisition price in the bitcoin market.
When the spot price of the cryptocurrency is below this level, it means that investors as a whole are currently in a state of net loss. On the other hand, the fact that the asset is above this metric suggests that the broader market is making some gains right now.
In the context of the current discussion, the realized price of the entire btc sector is not relevant, but only of a particular segment: the “short-term holders” (STH).
STHs are the investors who bought your coins in the last 155 days. Members of this group generally have weak convictions and can therefore be quite reactive to changes in the market.
Now, here is a chart showing the trend in the realized price of bitcoin specifically for these STHs over the past few years:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/10/Bitcoin-finds-rejection-on-this-historical-line-is-the-bear.jpeg" alt="Short-term bitcoin holders” width=”1800″ height=”1013″ loading=”lazy”/>
Looks like the asset retested this line just recently | Source: @jimmyvs24 on X
As shown in the chart above, the realized price of the short-term bitcoin holder is valued at approximately $27,800 right now. During its most recent recovery attempt, btc retested this line but ended up encountering major resistance.
In reality, the indicator has a long history of acting as resistance and support for the spot price of the cryptocurrency. Generally, this line has helped the asset during bull rallies, while hindering it in bear markets.
From the chart you can see that the price of the asset found resistance at this mark and remained below it throughout the bear market in 2022. However, with the rally that began in January of this year, the coin finally managed to find a break up. .
The realized price of STH became a support level as it boosted the asset during retests in March and June. However, with the August crash, bitcoin fell below the line again and has been unable to break above it since.
Given the importance of the line, the last retest of the indicator was quite important, so the fact that it ended in failure could be a worrying sign for the asset, as it may mean that a retracement towards a downtrend could have occurred. .
btc Price
Retests like the STH realized price test can sometimes take a while to finish correctly, but given that bitcoin has seen a sharp drop towards the $26,700 level since the rejection, it may be a confirmation that the asset was indeed rejected. this time.
<img decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/10/Bitcoin-finds-rejection-on-this-historical-line-is-the-bear" alt="bitcoin price chart” width=”1534″ height=”869″ loading=”lazy”/>
The price of the coin seems to have been going down in the last few days | Source: BTCUSD on TradingView
Featured image from Shutterstock.com, Charts from TradingView.com, Glassnode.com
