The Bitcoin (BTC) market is presently undergoing considerable changes in supply dynamics, with significant interactions between long-term holders (LTHs) and short-term holders (STHs).
As per the most recent evaluation from CryptoQuant, historically, such shifts have frequently signaled local market peaks or even cycle summits, depending on the prevailing market conditions and the broader economic landscape.
At this moment, demand from short-term holders continues to be a vital factor in maintaining Bitcoin’s price steadiness amid ongoing market fluctuations.
Long-Term Holders Compared to Short-Term Buyers
The assessment conducted by the CryptoQuant analyst Darkfost highlighted that short-term holders, especially those who purchased Bitcoin in recent months, are significantly impacting market sentiment.
By scrutinizing the realized price data from various short-term buy periods, clear support and resistance levels emerge.
These realized price figures encompass $41,000 for the overall average realized price, $85,000 for short-term holders in general, $99,000 for those who have held for one week to one month, $81,000 for one to three months, and $60,000 for three to six months.
These numbers indicate crucial psychological and technical price thresholds where market participants might undertake substantial buy or sell actions, as noted by Darkfost.
The analyst pointed out that the Short-Term Holder Spent Output Profit Ratio (STH SOPR) currently stands neutral at 1, following a drop from Bitcoin’s previous surge, which elevated its price to an all-time peak of $108,000. The STH SOPR functions as a crucial gauge to assess the profit-taking behavior of short-term holders.
A neutral SOPR signifies that recent selling activities by short-term holders have not proven to be highly profitable, which lessens the motivation for widespread sell-offs at current price rates.
However, this neutral condition suggests probable obstacles for an immediate bullish rebound. The decline in STH SOPR hints at decreasing realized profits, which could inhibit upward momentum in the near term.
Despite these hurdles, the demand from short-term holders has successfully absorbed much of the selling pressure from long-term holders, stopping abrupt price drops. Darkfost commented:
In summary, the selling pressure from LTHs has thus far been relatively well mitigated by the buying pressure from STHs. Nevertheless, we observe that the STH SOPR is declining, which may impede an immediate bullish recovery. In the short term, a phase of consolidation or even a deeper corrective movement could manifest.
Bitcoin Market Activity and Forecast
Currently, Bitcoin is trading at a price of $97,357 after registering a slight increase of 1.1% over the past day.
While this rise has assisted BTC in regaining positive momentum in recent weeks, it is still inadequate to push the cryptocurrency back to the six-digit price threshold or its all-time high exceeding $108,000.
Featured image produced with DALL-E, Chart from TradingView
