Bitcoin (
$110,171.00 ) has maintained a tight trading range between $28,000 and $30,000 since April 2023, a prolonged sideways movement that has been a rarity in the market. One of the reasons for this squeezed price range, especially after BTC dropped below $30,000, is price support created by short-term holders.
Short-term holders are entities that have held Bitcoin ( $110,171.00 ) for a relatively brief period, typically less than 155 days. Their behavior is crucial in analyzing Bitcoin ( $110,171.00 ) ’s performance as they often react more quickly to market changes, thereby influencing price movements.
Data from Glassnode showed that Bitcoin ( $110,171.00 ) ’s price has traded above the realized price for short-term holders since June 19. The realized price is a metric that calculates the average price at which all Bitcoin ( $110,171.00 ) s were last transacted. It represents the average cost of Bitcoin ( $110,171.00 ) for all users at any point in time, providing a sense of the market’s cost basis.
As of Aug. 8, the on-chain cost basis for short-term holders is $28,462. This means that all of the addresses on the Bitcoin ( $110,171.00 ) network that have acquired their coins in the past 155 days have bought them at an average price of $28,462.
Graph showing Bitcoin ( $110,171.00 ) ’s spot price and STH realized price from July 11 to Aug. 9 (Source: Glassnode)
Since the beginning of the year, Bitcoin ( $110,171.00 ) ’s price traded below the short-term holder realized price only twice — from Jan. 1 to Jan. 11 and from June 9 to June 19. These brief dips below the realized price underscore the resilience of Bitcoin ( $110,171.00 ) ’s support level.
Graph comparing Bitcoin ( $110,171.00 ) ’s spot price to STH realized price YTD (Source: Glassnode)
The heightened sell pressure from short-term holders, evident from their increased activity on exchanges, is also a potential contributing factor to Bitcoin ( $110,171.00 ) ’s sustained sideways movement. There has been a notable increase in the volume of BTC short-term holders in profit who have sent their holdings to exchanges in August.
Graph showing the volume of BTC short-term holders in profit have sent to exchanges from July 11 to Aug. 9 (Source: Glassnode)
An increase in Bitcoin ( $110,171.00 ) transfers to exchanges indicates a readiness to sell, which can create a supply glut, keeping the price from moving upward.
The behavior of short-term holders has created a solid support level for Bitcoin ( $110,171.00 ) ’s price, but it also contributes to the current sideways movement. The balance between buying at an average price and the readiness to sell has created a unique market condition where Bitcoin ( $110,171.00 ) ’s price has been stable yet constrained.
The post How short-term holders keep Bitcoin ( $110,171.00 ) price stable but constrained appeared first on CryptoSlate.
