Bitcoin Loses Historical Level, Analyst Says “Reclaim And Bounce, Or Die”
03 May 2024 - 12:00PM
NEWSBTC
An analyst has pointed out how Bitcoin recently closed below a
historically important on-chain level, a failure to reclaim which
could spell trouble for BTC. Bitcoin Fell Below Short-Term Holder
Cost Basis In Latest Crash In a new post on X, Maartunn discussed
BTC’s recent close below the realized price of the short-term
holders and stressed its importance in reclamation. The “realized
price” here refers to an on-chain indicator that tracks the price
at which the average investor on the Bitcoin network acquired their
coins. In other words, it measures the average cost basis in the
BTC market. Related Reading: Bitcoin On Track For $1 Million Per
BTC “Fair Value”, Analyst Says When the spot value of a
cryptocurrency is below this metric, it means that the average
investor in the market is carrying their coins at a loss right now.
On the other hand, being above the indicator suggests that the
holders as a whole are in the green currently. In the current
topic, the realized price of the entire Bitcoin market isn’t of
interest but rather of only a subsection: the short-term holders
(STH). The STHs are the BTC investors who bought their coins within
the past 155 days. These holders represent the inconsistent side of
the market, who easily show a reaction whenever a change like a
crash or rally occurs in the sector. Now, here is a chart that
shows the trend in the realized price specifically for these
investors over the past year: The price of the asset appears to
have seen a cross under this metric in recent days | Source:
@JA_Maartun on X The realized price of the Bitcoin STHs is floating
around $58,500. During the latest crash, Bitcoin went as low as
below $57,000, meaning that the plunge has put these investors
under pressure. Historically, the average cost basis of the STHs
has been significant for the cryptocurrency, as it has taken turns
acting as support and resistance, depending on the market’s phase.
During bullish trends, this metric often acts as a point of
support. The chart shows that when Bitcoin had declined near this
level earlier in the year, it had found a rebound. The metric acts
as resistance during bear markets, keeping the price below it.
These patterns may be related to how investor psychology works.
Related Reading: Crypto Analyst Predicts 244% Shiba Inu Rally Based
On Bull Flag In bullish periods, the STHs might view their cost
basis as a profitable buying opportunity, so they accumulate during
dips in it, thus helping the price turn around. In bear markets,
these investors could look at the level as a point of exit, as they
may not believe the price will go up any further. After closing
below the STH realized price earlier, Bitcoin is now fighting to
reclaim this historical level. It now remains to be seen if support
will once again be found or if the level will truly become lost.
BTC Price Bitcoin has climbed back above the STH realized price,
trading above $59,300. This is certainly a sign in the positive
direction, but it’s hard to say whether this recovery will last.
Looks like the price of the coin hasn't yet recovered much since
the crash | Source: BTCUSD on TradingView Featured image from Maxim
Hopman on Unsplash.com, CryptoQuant.com, chart from TradingView.com
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