Bitcoin’s Battle: Conquering the Short-Term Holder Cost Basis
According to on-chain data, Bitcoin needs to overcome a crucial level if it wants to stage a significant comeback in its rally. Analyst Root shared a chart indicating that the BTC price has been retesting the short-term holders’ cost basis or realized price (STHs). The realized price represents the average price at which investors acquired their Bitcoin. When the spot price is higher than this indicator, holders are currently in profit, while a price below suggests a market loss.
Understanding Realized Price for Short-Term Holders
The realized price refers to the overall investor base but can be specifically defined for certain groups. In this case, the focus is on short-term holders (STHs), who purchased their coins within the last 155 days. Their average cost basis should fall within the price range of the past five months.
Here’s a chart depicting the changes in realized price for Bitcoin STHs over recent years:
The Current State of BTC Price
As of now, Bitcoin is trading around $27,400, showing a 4% increase in the past week.
Hot Take: A Crucial Level for Bitcoin’s Rally
If Bitcoin manages to reclaim and surpass the short-term holders’ cost basis, it would be an encouraging sign for its future prospects. The realized price serves as a critical metric to determine investor profitability. By crossing this level, Bitcoin could potentially pave the way for a strong rally. Keep an eye on this key threshold as it could shape the trajectory of Bitcoin’s price movement in the coming days and weeks.
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