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Bitcoin Continues Its Downward Trend: Is $86,800 the Key Level to Monitor?
On-chain metrics reveal that Bitcoin's Realized Price for short-term holders currently sits at $86,800, making this a critical level to keep an eye on.
Bitcoin’s Price Still Below Key Cost Basis for Short-Term Investors
According to a recent post on X by on-chain analytics firm Glassnode, the profit and loss dynamics of Bitcoin short-term holders (STHs) are under scrutiny. At the center of this discussion is the Market Value to Realized Value (MVRV) Ratio, a metric that evaluates the relationship between Bitcoin's Market Cap and Realized Cap.
The Realized Cap represents a valuation model that determines the ‘true’ worth of each Bitcoin based on its last transaction price on the blockchain. This model assumes that the last transfer price corresponds to the most recent cost at which the coin changed hands. Therefore, the Realized Cap can be seen as the total capital that investors have spent to acquire Bitcoin.
In contrast, the Market Cap reflects the current market value of the cryptocurrency holdings. The MVRV Ratio, by comparing these two metrics, provides insights into the overall profit or loss situation of the Bitcoin network.
While the standard MVRV Ratio applies to the entire market, the focus here is on a specialized version for short-term holders—investors who bought their coins within the last 155 days.
What the STH MVRV Ratio Reveals
Glassnode’s shared chart highlights the trends in the STH MVRV Ratio over the past year, providing a glimpse into the profit-loss landscape for this group of investors.
Understanding these dynamics can help pinpoint significant support or resistance levels for Bitcoin, with $86,800 emerging as a pivotal threshold that could influence market sentiment in the near term.