Bitcoin prices have plummeted over the last 24 hours, bringing the price of the asset below $67,000. This is the next historical level of support that Bitcoin could reach.
Bitcoin is now not far from the short-term holders’ realized price
James Van Straten in his article “Analyst James Van Straten” pointed out, post On X, Realized Bitcoin Price for Short-Term holders has increased recently. It is currently around $64,000.
The “Realized PriceThis is an ” on-chain metric which keeps track of average BTC investor’s cost basis. This indicator uses the “Realized CapModel for cryptocurrency
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If the spot price of an asset is higher than its Realized Price it indicates that the investor has some unrealized net profits. The coin’s price under the metric indicates that losses are dominating the market.
The Realized Price for a particular sector segment will be of interest in the context of this topic: Short-Term Holders (STHs). STHs are all investors that bought coins in the last 155 days.
This chart shows the trends in Realized Prices of Bitcoin STHs for the past few years.
The graph above shows that the Bitcoin STH realized price soared during the recent rally to the All-Time High Price (ATH). The trend is logical, since the STHs are the newcomers to the market. They would have been forced to purchase at higher prices when the asset rose, which pushed the average of the cohort up.
BTC is in a consolidation phase after the March ATH. The indicator has slowed down, but it’s still on the rise. This metric now stands at $64,000.
How important is the realized price of the STHs now? In the past, this indicator often acted both as major resistance and support lines for cryptocurrency.
This line can be used to form a bottom for the crypto during bullish times, keeping the coin above the level. During bearish phases, the line is used as a barricade, preventing it from rising above the level. The coin’s trend has generally changed when it crosses this line.
It is likely that this pattern holds up because STHs can be very reactive. Cost basis is important for all investors, but the STH cohort can react more quickly to a new test of cost basis.
STHs can decide to increase their purchases when the prices fall to their cost-basis average, believing that this is only a temporary drawdown. “dip” opportunity. However, in bearish periods, the market may respond to this retest with panic sales.
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Chart shows Bitcoin has found support at this line, even during the recent crash that occurred around the beginning of May. This could indicate that a bullish mood is still dominant.
It will be fascinating to see what happens if a retest is conducted. BTC has dropped below $67,000 over the last day, while the STH Realized Price closed at $64,000.
BTC price
Bitcoin’s price is currently around $66,800. This represents a drop of over 3% from the previous week.
Chart from TradingView.com. Image from Dall-E.
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Source: www.newsbtc.com
