One analyst explained how a major bitcoin indicator has returned to levels that can be considered healthy for a bull market uptrend.
bitcoin Short-Term Holder Price No Longer Growing Too Fast
in a new <a target="_blank" href="https://x.com/btcjvs/status/1871574513911042464″ target=”_blank” rel=”noopener nofollow”>mail On x, analyst James Van Straten discussed the 7-day rate of change in the realized price of short-term bitcoin holders. “Realized Price” here refers to an on-chain metric that tracks the cost base of the average investor or address on the network.
When the value of the indicator is greater than the spot price of the cryptocurrency, it means that the holders as a whole can be assumed to be in a state of net profit. On the other hand, being below the mark implies that the general market has losses.
In the context of the current topic, the Realized Price of only one particular market segment is of interest: short-term holders (STH). This cohort includes investors who purchased their coins in the last 155 days.
STHs make up one of the two main divisions of the btc sector based on holding time, while the other group is known as long-term holders (LTH).
Statistically, the longer an investor holds their coins, the less likely they are to sell them at any time, which is why STHs are considered to include the weak hands in the market, while LTHs represent the determined HODLers.
Now, here is the chart shared by the analyst showing the trend of the Realized Price of STH, as well as its 7-day exchange rate, over the past few years:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/12/Crucial-Bitcoin-Metric-Returns-to-Healthy-Bullish-Levels-Analyst.jpeg" alt="Realized bitcoin Price” width=”1800″ height=”1013″/>
The 7-day rate of change in the metric appears to have gone down in recent days | Source: <a target="_blank" href="https://x.com/btcjvs/status/1871574513911042464/photo/1" target="_blank" rel="noopener nofollow">@btcjvs on x
As can be seen in the chart above, the realized price of bitcoin STH has increased over the past few months as the rally in the price of the coin occurred. The reason behind this trend is, naturally, the fact that STHs represent recent buyers, who have to buy at increasingly higher prices during a bull run.
The cryptocurrency has been trading above this cohort's cost base for some time now, implying that its members have been enjoying profits. Historically, the line has served as a sort of boundary between bearish and bullish macro trends, so btc continuing to trade above it is a positive sign.
As Van Straten has noted, another possible bullish signal is the fact that the 7-day rate of change on the indicator has recently experienced a cooling. Previously, the realized price of STH was expanding at a notable rate, something that has generally led to highs for the coin.
Now that the indicator is growing at a healthier rate, it is possible that bitcoin could continue its bull run sustainably.
btc Price
At the time of writing, bitcoin is trading around $98,400, down more than 6% over the past week.
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Looks like the price of the coin has shot up over the past day | Source: BTCUSDT on TradingView
Featured image by Dall-E, Glassnode.com, TradingView.com chart
