Bitcoin's price recently fell below the average entry point for traders$BTC

Prompting concerns that the current sell-off might deepen. Over the past week, Bitcoin's value has dropped by over 5.5%, reaching a six-week low of $58,400 on June 25. Analysts at Glassnode, a market intelligence firm, have warned that Bitcoin's fall below its short-term cost basis could lead to a more significant correction.

Glassnode's "Week On-chain" newsletter, published on June 25, notes, "Since mid-June, the spot price has plunged below the cost basis of both the 1w-1m holders ($68.5k) and 1m-3m holders ($66.4k)." This development could signal a loss of investor confidence, potentially resulting in a prolonged and deeper market correction.

The short-term holder (STH) cost basis, or realized price, is a metric indicating the average acquisition price for Bitcoin investors who are considered short-term holders. These holders are typically defined by the movement of coins that have been held for less than 155 days. According to LookIntoBitcoin, Bitcoin's drop below $64,000 on June 23 took it below the STH realized price, which stood at $64,591 at the time.

Further compounding the issue, the latest decline has brought Bitcoin's price dangerously close to the cost basis of the 3m-6m holders, which is $57,300. This cost basis is still increasing, even as Bitcoin's price continues to fall.

Glassnode's report also points out that the cost basis for 1w-1m holders has now fallen below that of 1m-3m holders. This shift indicates diminishing momentum on the demand side and suggests a net capital outflow from Bitcoin.

The broader implications of these trends could mean more turbulence ahead for Bitcoin, with the potential for a more extended period of price decline and recovery. As Bitcoin's price hovers near critical support levels, market participants and analysts alike are closely watching for signs of either a rebound or further decline.