The head of research at on-chain analytics firm CryptoQuant explained why selling pressure from bitcoin traders may be easing.
Short-term bitcoin holder realized price has risen to $60,000
in a new twitter.com/jjcmoreno/status/1780979596097204310″ target=”_blank” rel=”nofollow”>mail In “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 and do not tend to HODL their coins. This group can be quite reactive to market movements and easily panic sell whenever a dip or rally occurs.
In general, profit investors are more likely to sell their coins, so one way to assess whether STHs are likely to participate in a sell-off is through their profit/loss margin.
Here, Moreno has cited the profit/loss margin of this cohort based on its realized price.
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/04/Bitcoin-Trader-Selling-Pressure-Is-Easing-CryptoQuant-Director-Explains-Why.jpeg" alt="bitcoin STH Realized Price” width=”4096″ height=”2580″ loading=”lazy”/>
The realized price of the group appears to have been going up in recent weeks | Source: twitter.com/jjcmoreno/status/1780979596097204310/photo/1" target="_blank" rel="nofollow">@jjcmoreno on x
The realized price of STH (highlighted in pink) here refers to the average cost basis or acquisition price of investors who are part of this cohort calculated using blockchain transaction history.
When the spot value of the cryptocurrency is above this level, it means that these holders as a whole are making some net profits right now. On the other hand, the fact that the price is below the metric implies the predominance of losses.
From the chart above, you can see that bitcoin has been above the realized price of STH for the past few months, meaning these traders have been enjoying profits.
This is typical during bull markets as the price continues to rise, allowing these investors to make profits. While STHs tend to stay in the green in these periods, highs are likely if these gains become extreme.
As evident from the chart, the P&L spread shot up to significant levels just as btc established its latest all-time high, which remains the high until now.
Recently, as bitcoin has consolidated between the $60,000 to $70,000 range, the realized price of STH has increased rapidly, now reaching a value of around $60,000. This is because as STHs have traded in this range, their acquisition prices have been revalued at these higher levels, which has pushed up the average.
btc has been pretty close to this level recently, so STHs wouldn't have as much gains now. “bitcoin selling pressure from traders may be easing as unrealized profit margins are now basically zero,” notes the CryptoQuant director.
btc Price
bitcoin has continued to show contained action within its recent range as its price is still trading around $65,200.
x/zoiFxCKI/” alt=”bitcoin price chart” width=”1534″ height=”854″/>
Looks like the price of the asset has rebounded in the past day | Source: BTCUSD on TradingView
Featured image by Kanchanara on Unsplash.com, CryptoQuant.com, TradingView.com chart
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