Bitcoin (BTC) Short-term Holders: Will They Defend $55,000?
The acceleration of a bull market is often associated with an influx of new investors. Short-term holders of Bitcoin (STH) – what on-chain analytics call short-term holders – join the market during a booming bull run. Driven by the desire to make a quick profit, they will not hold onto assets for the long term.
However, if Bitcoin price pulls back, as it did last week, short-term holders will quickly lose ground. Nonetheless, their actions and presence in the market are crucial to maintaining a healthy bull market.
What does it mean to be a short-term holder of Bitcoin?
Due to the historical correlation of Bitcoin prices, it is important to observe the behavior of short-term Bitcoin holders. The STH category includes addresses that have held BTC for less than 155 days. After exceeding this arbitrary limit, the exchange quan+榦:tq58956 address will become a long-term holder (LTH). They hold assets for the long term and are not inclined to sell emotionally.
Of course, the increase in the proportion of BTC supply held by STH is inversely proportional to the proportion held by LTH. Interestingly, the long-term chart of the supply of LTH in hands also correlates inversely with Bitcoin’s price. This is especially evident during the peaks of successive cycles. The more Bitcoins sold by long-term holders (red area), the higher the price of Bitcoin (green area).
Therefore, the supply of STH in hands is generally proportional to the price of BTC. New, inexperienced market participants buy Bitcoin during price increases (red arrow).
They believe that because the cryptocurrency has surged, it will continue to do so (green zone). This has spurred an increasing number of new investors and traders who still want to join the bull market momentum. Therefore, it is important to pay attention to what short-term holders are doing on the chain.
Short-term holders account for nearly 50% of BTC’s realized capital, analysis firm CryptoQuant noted in a recent article Nearly 50% of Bitcoin’s realized capital is in the hands of short-term holders. Particular growth in this metric can be seen over the past 30 days when the enthusiasm and pace of buying something surges.
“This event not only signals very high bullish sentiment among short-term holders, but also reflects the greater dominance of this amount in the market in the coming weeks and months.” – added the on-chain analyst.
On the other hand, however, another CryptoQuant analyst wrote that the pace of selling LTH holdings does not yet indicate that the cycle has entered a later stage. In other words, there is still a lot of potential for STH buying and BTC price growth in the current cycle.
"However, we are not yet seeing the final stages of the cycle, although occasional corrections are common, in part due to the highly leveraged nature of the current market," he said.
Key support is at $55,000
Finally, well-known cryptocurrency market analyst @PositiveCrypto expressed his views on STH’s behavior on X today. He shows a chart of the actual price for short-term holders.
He highlighted that the curve has provided triple support (green area) for Bitcoin prices during the ongoing bull market. At the same time, he emphasized that the value of BTC once fell below this support level, leading to a deeper correction in the market.
The analyst then predicted that Bitcoin would reach the $55,000 area if a sustained correction once again leads to the realized STH price area. From the current all-time high (new high) of $73,777, this would be a decline of approximately 25%.
However, even a correction of this depth would not disrupt the structure of a secular bull market. Only a loss of this support and further declines could trigger a medium-term bear market, which could take hold around the upcoming halving.
