Get Ready for a Potential Retest of Short-Term Holder Cost Basis in Bitcoin
Recently, CryptoQuant Head of Research Julio Moreno shared insights on how Bitcoin (BTC) is approaching the Realized Price of short-term holders, signaling a possible retest of this crucial level. Understanding this indicator is essential for gauging market sentiment and potential price movements in the near future.
Understanding the Realized Price Indicator
- The Realized Price is an on-chain metric that tracks the average acquisition price of Bitcoin held by investors or addresses on the network.
- When the spot price of BTC exceeds the Realized Price, it indicates that market participants are in profit.
- If Bitcoin’s value falls below this metric, it suggests that investors are facing losses.
- When the two values are equal, it signifies a balance between unrealized profits and losses in the market.
Focus on Short-Term Holders
- In this analysis, the Realized Price of short-term holders (STHs) is particularly significant.
- STHs are investors who purchased their BTC within the past 155 days.
- Monitoring the Realized Price of STHs provides insights into their average cost basis and potential market dynamics.
Potential Retest of Short-Term Holder Cost Basis
- According to Moreno, a retest of the average cost basis of STHs appears to be on the horizon.
- Historically, such retests have played a crucial role in determining Bitcoin’s price direction.
- The chart presented by Moreno illustrates past interactions between Bitcoin’s spot price and the Realized Price of STHs.
- During previous retests (marked with green circles), Bitcoin found support at this level and continued its upward trajectory.
- In contrast, instances where the asset failed to retest the level (marked with red circles) resulted in corrections ranging from 8% to 12%.
- The most recent occurrence of this trend was observed in late April or early May.
Current BTC Price Movement
- As of now, Bitcoin is trading at approximately $65,400, marking a decrease of over 6% in the past week.
The Future Outlook
With a potential retest of the Realized Price of STHs looming, the crypto market is poised for a significant price movement. Traders and investors should closely monitor the outcome of this retest as it could signal the next major trend for Bitcoin. Whether the market witnesses a breakout above this level or a breakdown below it will dictate the short-term price action of BTC.
Hot Take: Brace Yourself for Bitcoin’s Next Move
Bitcoin’s proximity to a retest of the short-term holder cost basis indicates a critical juncture for the cryptocurrency. The outcome of this retest could set the tone for Bitcoin’s price trajectory in the coming days. Stay vigilant and watch closely as Bitcoin navigates through this crucial phase.
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