Bitcoin is facing a battle for a key bull market uptrend line, which it has lost for the first time in nearly a year.
Data from on-chain analytics platform CryptoQuant shows Bitcoin (BTC) price action is retesting the strike price of short-term investors (STH).
BTC price rally brings short-term investors back into profitable territory
Bitcoin STH performance is an important reference point during bull markets, as the cost base of this group of speculative investors often forms long-term support.
The same thing has happened since the current bull market began in early 2023 — BTC/USD only fell below STH's strike price for a short period of time.
Now, another sale is coming to an end. STH entities, defined as those holding a certain amount of BTC for 155 days or less, are no longer subject to losses.
“Bitcoin price recently regained the strike price of STH,” CryptoQuant contributor J.A.Maartunn wrote in a Quicktake blog post on July 18.
“This is a positive sign as short-term investors typically add to their positions when Bitcoin returns to their strike price, creating a strong support level.”
Strike price of STH Bitcoin | Source: CryptoQuant
Maartunn also noted that “since 2023, Bitcoin has twice lost and regained its short-term investor strike price, each time resulting in gains of at least 30%.”
The exact strike price of STH varies by source, with CryptoQuant's estimates being slightly lower than some other sources.
“Over the past 30 days, the short-term (STH) investor group has experienced a significant decline in returns, with more than -66% of their supply moving into unrealized losses,” said analytics firm on- chain Glassnode wrote in their latest edition, The Week Onchain, published on July 16th.
“This is one of the largest declines in STH profits on record. This suggests that a large number of ‘peak buyers’ have seen their portfolio returns challenged in recent weeks.” Glassnode set STH's strike price at $64,300 at the time of writing.
Bitcoin Analyst Warns of Low Trading Volume
The $65,000 level remains the main target that bulls need to conquer to continue the uptrend.
Among those who see opportunities for continued upside is prominent analyst Aksel Kibar.
“This is the 5th month BTC/USD has not backed down from strong resistance around $65K,” he told followers on X.
“I see this as a long-term uptrend. Sticking to resistance and not intending to sell off often signals a breakout ahead.”
BTC/USD Chart | Source: Aksel Kibar/X
On the daily timeframe, popular analyst JT argued that BTC/USD needs to overcome some Fib retracement resistance to have a chance at a new all-time high.
BTC/USD Chart | Source: JT/X
In a word of caution, JT added that trading volumes were “remarkable” when compared to what was seen at four-month lows around $53,000.
“Trading volume has increased sharply in the recent price increase from $53K. It has decreased suddenly. It is currently below the average level of the volume profile indicator.
You can see the coin price here.
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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