bitcoin has found a rebound above the $66,000 mark following a drop towards the on-chain cost base of the short-term incumbent whales.
bitcoin drawdown had almost put whales under pressure in the short term
As noted by an analyst at CryptoQuant Quicktake bitcoin-Price-Above-STH-Whales-Realized-Price” target=”_blank” rel=”nofollow”>mailbtc price had gotten closer to the headline whales' short-term realized price during the recent decline, but had still managed to stay above that level.
“Realized Price” here refers to an on-chain indicator that, in short, tracks the cost basis (i.e. acquisition price) of the average investor in the bitcoin market.
When the spot price of the cryptocurrency is trading above this level, it means that investors as a whole are in a state of unrealized profits right now. On the other hand, being below implies that the overall market is suffering losses.
In the context of the current discussion, the Realized Price of the entire bitcoin market is not of interest, but that of only a part of it: the short-term holding whales (STH).
STHs refer to btc investors who purchased their coins in the last 155 days, while whales are classified as entities that own more than 1,000 btc. As such, STH whales would refer to large investors who bought over the past five months.
Naturally, the realized price of this group would indicate the average whale buying price over the last five months (and this price would obviously have to be one that the cryptocurrency has traded at on some occasion within this time period).
Now, here is a chart showing the trend in the realized price of bitcoin for STH whales over the last decade:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/04/Bitcoin-Rebounds-After-Nearing-Short-Term-Whale-Cost-Basis.png" alt="bitcoin holder whales in the short term” width=”1280″ height=”738″ loading=”lazy” data-recalc-dims=”1″/>
The value of the metric appears to have shot up in recent months | Source: bitcoin-Price-Above-STH-Whales-Realized-Price" target="_blank" rel="nofollow">CryptoQuant
From the chart, you can see that the realized price of STH whales has been rising rapidly along with the strong rally that bitcoin has seen this year. This makes sense, as STHs represent new hands entering the market, who would have to buy at higher prices as the asset's rise continues.
Not only that, but STHs that age beyond 155 days (i.e., those who purchased at relatively low prices) exit the cohort, thus raising the average even further.
The group these mature investors advance to is known as the long-term holder (LTH) cohort. On the same chart, the quant also attached the realized price data of LTH whales.
It would appear that these veteran whales have a base cost of just $21,500, meaning these investors would reap big rewards for their patience. In contrast, STH whales have their Realized Price at $60,700.
During the recent bitcoin crash, the asset was on the verge of retesting this mark. Historically, these new tests have caused reactions in the market and during bull runs, this reaction has often appeared in the form of buying. This may be the reason why the cryptocurrency found its bounce near the $60,700 level.
btc Price
With its latest bounce, bitcoin has so far managed to recover towards the $66,500 level.
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Looks like the price of the coin has made some recovery from its recent drop | Source: BTCUSD on TradingView
Featured image by Thomas Kelley on Unsplash.com, CryptoQuant.com, TradingView.com chart
Disclaimer: The article is provided for educational purposes only. It does not represent NewsBTC's views on whether to buy, sell or hold investments, and investing naturally carries risks. It is recommended that you conduct your own research before making any investment decisions. Use the information provided on this website at your own risk.
