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Bitcoin Crashes: Nearest On-Chain Support Level Identified
Bitcoin has experienced a significant decline over the past 24 hours. Analysts are closely monitoring the nearest on-chain support, particularly focusing on the Realized Price of 1-week to 1-month-old Bitcoin holders. This metric serves as a critical indicator of market dynamics and investor behavior.
1. What Is the Realized Price?
The Realized Price tracks the acquisition cost of Bitcoin held by various investor cohorts.
If the Realized Price is below the spot price, the market reflects net profit for holders. Conversely, if it surpasses the spot price, the market is dominated by losses.
2. Focus on Short-Term Holders (STHs)
The 1-week to 1-month-old holders, a subset of STHs, are currently of particular interest.
These investors represent addresses holding Bitcoin for at least a week but not exceeding a month.
3. Current Support Level
As of now, the Realized Price for this group is $97,900.
This level acted as support recently when Bitcoin dipped below $99,000 but rebounded before hitting the $97,900 threshold.
4. Behavior of STHs
STHs, especially the 1-week to 1-month cohort, are the most likely to react to price changes due to their shorter holding period.
When the Bitcoin price nears their Realized Price, these holders often buy, viewing the dip as an opportunity.
5. Chart Insights
Historical data shows the Realized Price of this group increases during price rallies, reflecting higher acquisition costs for new investors.
This trend signifies that support levels are dynamic and can rise as the market evolves.
6. What to Expect Next
Bitcoin has shown some recovery, trading at approximately $102,200 at the time of writing.
However, if bearish momentum persists, the $97,900 level could be retested, potentially triggering buying activity from this cohort.
7. Implications for Investors
The behavior of 1-week to 1-month holders can serve as a signal for broader market trends.
Observing this support level could offer insights into short-term price movements and sentiment shifts.
As Bitcoin navigates this volatile phase, the Realized Price of key cohorts like the STHs will remain crucial in predicting potential support and resistance levels.