Bitcoin
Bitcoin could fall to $60,000 if this support is lost: CryptoQuant Head
Network data shows that Bitcoin is approaching the “realized price” of short-term holders, a retest that has been historically important for BTC.
Bitcoin Is Close to Seeing a Retest of Short-Term Holder Cost Basis
In a new publish on X, CryptoQuant Head of Research Julio Moreno discussed how BTC has recently been close to the realized price of short-term holders.
O “Realized Price” here refers to an on-chain indicator that, in short, tracks the average price at which investors or addresses on the Bitcoin network purchased their coins.
When the cryptocurrency’s spot price is higher than this metric, it means that the average market holder is currently making some profits. On the other hand, the value of BTC in the indicator suggests the dominance of losses among investors.
Of course, when the two are exactly equal, it can be assumed that the market as a whole holds an equal amount of unrealized profits and losses. Collectively, holders could be considered to have just reached the break-even point on their investment.
In the context of the current topic, the Realized Price of only a specific part of the sector is the focus: the short-term holders (STHs). STHs are investors who have purchased your coins in the last 155 days.
Below is a chart showing the realized price trend of Bitcoin STHs over the last two years:
The chart above shows that the price of Bitcoin is close to the realized price of STHs. This means the margin is small even though these investors are making profits right now.
Thus, it is possible that if the cryptocurrency continues on its latest downward trajectory, a retest of this cohort’s average cost base may be imminent. In the past, these retests have proven to be relevant to the asset.
Moreno highlighted in the graph the interactions that the asset’s spot value showed with this level in the last two years. It appears that during two of these retests (marked with green circles), the coin found support at this level and rebounded higher to continue the upward momentum.
However, in the other three cases (red circles), Bitcoin failed to retest the level and observed a decline. These corrections ranged from 8% to 12%, with the last occurrence of the trend being at the end of April/beginning of May.
With another new test possibly approaching for the cryptocurrency, it would be interesting to see which of the two patterns it would follow this time. If the level breaks, the analyst notes, “the price could fall to around US$60,000”.
BTC Price
At the time of writing, Bitcoin is trading around $65,400, down more than 6% over the past week.
Featured image by Dall-E, CryptoQuant.com, chart by TradingView.com