New Bitcoin accumulation to take place at $120K

Takeaways from the conference:

• Bitcoin surpasses $120,000 as the selling pressure of long-term investors eases.

• Investors who hold short-term bonds are now absorbing their losses. This is a sign of a stabilizing market.

• Neutral LTH flow may be the catalyst for a breakout.

BitcoinBTCOnchain data suggests that the market is entering an accumulation phase, as the selling pressure of long-term investors (LTHs), eases.

The following is a list of GlassnodeThe Short-Term Holder Realized Value ratio (RVT), which measures the value of short-term holdings, has steadily been decreasing since May. This is a reflection of a cooling in speculative exuberance. Historically, high RVT values have been associated with hot markets. Conversely, contractions towards the end of the year are usually associated with a cooling market. “full market detox” The zone showed that the short-term traders were achieving fewer gains in comparison to network activity. If this trend is sustained, it could be the foundation for new accumulations as investors wait for more clarity in market direction.

The balance on the supply side between institutional inflows and long-term holders remained crucial. The data shows that, after a consistent month-long distribution of the Long Term Holders (3D) Net Position change metric have now moved into neutral territory.

It appears that recent gains may not be as strong, and that exchange-traded-funds (ETFs), along with new flows of money could become the primary drivers in the near term.

If this supply cooling dynamics holds, Bitcoin might be forming an important structural base between the range of $115,000-$120,000. This would be similar to the consolidation phases observed in April and March, where neutralized LTH flowing preceded a rapid upward movement.

Analysis suggested that the market was preparing to make a major break out attempt. $120,000 emerged as the critical threshold.

Related: Bitcoin’s next ‘explosive’ move targets $145K BTC price: Analysis

Absorbed short-term losses of holders show up in the absorption

Investor behavior has also shown important signs. According to CryptoQuantShort-term Holders (STHs), have experienced a recent period of stress. The STH-SOPR dropped as low as 0.992% through September. It was a period where the speculative pockets consistently suffered losses. This is often indicative of weak hands who have left the market. 

Last week the index rose to 0.995%, which is still lower than August’s level of 0.998 but signals an early stabilization.

In the past, resets have tended to take two forms: either a prolonged loss realization phase that leads to corrective phases or an a “healthy reset” When selling pressure quickly abates. BTC is comfortably consolidating at $115,000 and the STH/SOPR recovery could indicate a market that has a lot of resilience in advance of a new bullish phase. 

Related: Bitcoin bulls charge at $120K with traders expecting new all-time high

The article is not intended to provide investment advice. Risk is inherent in every investment decision and trade. The reader should always do research prior to making any kind of decision.