Bitcoin Short-Term Holder Realized Price
Bitcoinโs short-term holder realized price is currently around $53,200, indicating that the average investor is still in a state of profit despite the recent drop in BTCโs spot value.
The realized price is an on-chain metric that calculates the average price at which Bitcoin investors acquired their coins. It takes into account the transaction history of each coin and assumes that the last transfer was the last time it was purchased.
When the spot value of Bitcoin falls below the realized price, it means that the average investor is now at a loss. Conversely, a break above the realized price indicates that the market as a whole is in net profits.
In this case, we are specifically interested in the realized price of short-term holders (STHs), who are investors that bought their coins within the past 155 days.
Trend in Short-Term Holder Realized Price
A chart depicting the trend in Bitcoinโs short-term holder realized price shows that it has increased recently as the price of the asset has risen. This is because STHs, being recent buyers, continuously purchase at higher prices during an uptrend, thus raising their average cost basis.
Currently, the realized price for STHs is approximately $53,200. Despite BTCโs sharp drop below $68,000 in the past day, STHs would still be in significant profits even after this drawdown.
In previous bull markets, the average cost basis of short-term holders was reset multiple times. This trend was particularly evident during the 2017 bull run when the price retested this level several times.
This pattern suggests that when Bitcoin retests its cost basis level during a bull trend, it tends to find support and reverse its direction.
Explanation for the Trend
The fickle nature of short-term holders may explain why this trend occurs. The cost basis is an important level for these investors, and when a retest happens, they may panic and react.
During uptrends, these holders are more likely to buy more when a retest of their cost basis occurs because they believe that the same price levels that were profitable before will be so again in the near future.
While it is not certain that Bitcoin will retest this level in the current bull market, historical precedent suggests that a correction may come close to it.
BTC Price
Following a 7% drop in the past day, Bitcoin is currently trading at around $67,700.
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