As a seasoned crypto investor with years of experience in this volatile market, I can’t help but feel a mix of excitement and caution as Bitcoin approaches a crucial trendline that could signal its entry into a new bull market. Based on past price action and technical analysis, this development is an important step towards re-entering a price point that has historically led to substantial gains.
Bitcoin is almost ready for a significant surge forward as it approaches a pivotal trendline from the bull market that was breached in June 2021.
In technical terms, reaching this development is crucial for Bitcoin to regain a historically significant price level, potentially leading to substantial growth.
Indicator of Market Recovery
Based on data from cryptocurrency analysis company CryptoQuant, the recent fluctuation in Bitcoin’s price aims to reexamine the Short-Term Holder (STH) Realized Price – a significant gauge for interpreting market trends.
J.A. Maartunn, a thought leader at CryptoQuant, pointed out that for determining Bitcoin’s price trends in the short term, the realized price holds significant value. Specifically, this price represents the average purchase price for Bitcoin held by short-term investors, defined as those who have owned the cryptocurrency for under 155 days.
Previously, the STH’s past price has functioned as a dependable reference point for estimating potential rebound prices during a bullish trend. At present, the Bitcoin market is undergoing another significant challenge to this benchmark, and recent fluctuations suggest a possible return to this pivotal figure.
Maartunn reveals that Bitcoin’s recent regain of its Realized Price in the market, denoted as STH (Short-Term Holder), represents a “favorable indication.” This suggestion could potentially signal an amassing period for those investors with shorter holding durations.
In simpler terms, the analyst points out that this scenario often leads to more purchases by investors. They want to either lower their overall cost per share by buying more at the same price (averaging down) or expand their holdings with additional shares bought at the same entry price.
Since early 2023, Bitcoin has regained its realized price in the STH market on two occasions. Following each recovery, Bitcoin experienced growth of at least 30%. (Maartuun’s observation)
The asset regaining its selling threshold (STH) price may indicate that a significant upward price movement is imminent.
Bitcoin Challenges and Opportunities Ahead
Despite the positive outlook, there are challenges ahead for short-term investors based on the latest findings from Glassnode, a well-known blockchain analytics company.
According to the latest Glassnode report, over the past month, approximately two-thirds of Bitcoin (BTC) holdings have seen their value decrease for these investors at present prices.
This marks one of the most substantial declines in profits for short-term investors ever recorded, implying that many who bought near the peak have suffered considerable losses.
In line with this observation, Santiment has revealed that the number of Bitcoin holders, defined as any wallets containing more than zero coins, has been experiencing a significant decline. Furthermore, according to Santiment’s analysis, many traders remain convinced that the all-time high in March 2024 represented the peak for Bitcoin.
Despite the current challenging market conditions, as indicated by our market intelligence platform, the likelihood of a recovery following significant sell-offs is actually higher.
The number of Bitcoin holders, or those possessing wallets with more than zero coins, has been decreasing significantly. This trend persists despite some traders’ conviction that the March all-time high represented the peak for 2024. Mass sell-offs like these could actually boost the likelihood of a subsequent price recovery.
— Santiment (@santimentfeed) July 17, 2024
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2024-07-19 04:34