Bitcoin Price Struggling but Short-Term Holders Might Be Setting the Stage for $150K

Bitcoin has recently displayed signs of upward momentum, trading at $85,215, marking a 2.2% increase in just the past day. Despite this short-term gain, the asset remains down by over 21.2% from its all-time high of $109,000 reached in January.

The ongoing price fluctuations have left Bitcoin in a downward trend on a broader time scale, with investors and analysts closely watching for signs of a rally.

Path To $150k: Short-Term Holders’ Changing Behavior

Despite the recent dip, data from CryptoQuant provides interesting insights into Bitcoin’s market dynamics. According to one of CryptoQuant’s contributors, Onchained, the behavior of short-term holders is a key factor to observe in the current market.

Onchained’s analysis suggests that short-term holders, defined as those who have held Bitcoin for between one and three months, are no longer panicking and selling at a loss as they did in previous market cycles. The analysis reveals a slowdown in the selling pressure from this group, suggesting a shift in sentiment.

Onchained’s report highlights the importance of the Short-Term Holder Net Realized PNL to Exchanges (CEXs) metric. This metric helps determine the selling pressure on Bitcoin, showing who is selling, whether they’re selling at a profit or loss, and the overall intensity of the market’s movement.

The data indicates that while short-term holders are selling, the realized losses have been relatively low compared to unrealized losses. This suggests that these holders, despite being in the red, are opting to hold their positions rather than panic sell.

Onchained further notes that this reduction in selling pressure could indicate the formation of a market bottom. Historically, when realized losses from short-term holders have been low and selling pressure has diminished, it has marked the end of a downward trend and the beginning of a recovery phase.

With 28% of Bitcoin’s circulating supply in the hands of short-term holders, if these coins transition into long-term holders, it could significantly contribute to Bitcoin’s price surge beyond $150,000.

Decreasing Selling Pressure and What It Means for Bitcoin’s Future

Another CryptoQuant analyst, CryptoOnchain, has pointed out that the selling pressure from short-term holders is indeed decreasing, as reflected in both the Short-Term SOPR chart and the UTXO Age Band for holders between one to three months.

The data shows a decrease in Bitcoin being moved by this group, suggesting that short-term investors are holding off on making further sales. This aligns with Onchained’s view that a reduction in short-term selling pressure could signal a market bottom.

If the trend of lower selling pressure continues, Bitcoin could see more stability or even a price rebound. As we approach a crucial phase for Bitcoin, all eyes will be on these short-term holders and the potential for a longer-term shift in sentiment.

Featured image created with DALL-E, Chart from TradingView