The current Bitcoin (BTC) market is witnessing significant changes in supply dynamics, with notable interactions between long-term holders (LTHs) and short-term holders (STHs).
In the most recent analysis from CryptoQuant, such shifts have historically signaled local market peaks or cycle peaks, depending on the market environment and broader economic conditions.
Currently, demand from short-term holders plays a crucial role in maintaining Bitcoin’s price stability amid market fluctuations.
The analysis by CryptoQuant’s Darkfost highlights the influence of short-term holders, particularly those who recently acquired Bitcoin, on market sentiment.
Examining realized price data for various short-term holding periods reveals distinct support and resistance levels.
These realized price points include $41,000 for the general average, $85,000 for short-term holders overall, $99,000 for holders within one week to one month, $81,000 for one to three months, and $60,000 for three to six months.
According to Darkfost, these figures represent significant psychological and technical price levels where market participants may make substantial trading decisions.
The Short-Term Holder Spent Output Profit Ratio (STH SOPR) currently stands neutral at 1, following a decline from Bitcoin’s last rally to an all-time high of $108,000. The STH SOPR is a critical metric for evaluating short-term holders’ profit-taking behavior.
A neutral SOPR suggests that recent selling activity by short-term holders has not been highly profitable, reducing the incentive for widespread sell-offs at current prices.
Despite this, a neutral stance could pose challenges for an immediate bullish recovery, as diminishing profits may slow upward momentum in the short term.
Short-term holders’ demand has successfully offset much of the selling pressure from long-term holders, preventing steep price drops. Darkfost mentioned that:
“The selling pressure from LTHs has been absorbed by the buying pressure from STHs. However, the declining STH SOPR may hinder a swift bullish recovery. A consolidation phase or even a deeper correction could be on the horizon.”
In terms of market performance, Bitcoin is currently priced at $97,357, with a 1.1% increase in the past day.
While this uptick has contributed to positive momentum in recent weeks, it may not be adequate to push the cryptocurrency back to six-digit price levels or its all-time high above $108,000.
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