Bitcoin Faces Critical Support Amid Long-Term Holder Selling Pressure—Analyst

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As a seasoned researcher with years of observing and analyzing the cryptocurrency market, I find it fascinating to delve into the dynamics between long-term holders (LTHs) and short-term holders (STHs). The current market trends have me reminiscing about the rollercoaster ride that is Bitcoin.

The latest analysis from CryptoQuant has caught my attention, as it often serves as a compass in navigating this complex landscape. Historically, shifts in supply dynamics between LTHs and STHs have been reliable indicators of local market tops or even cycle peaks, depending on the broader economic conditions.

In this instance, demand from short-term holders is playing a pivotal role in maintaining Bitcoin’s price stability amidst the ongoing volatility. The realization price levels identified by Darkfost, such as $41,000 for the general average realized price and $99,000 for holders within one week to one month, offer valuable insights into market participants’ behavior.

However, it’s essential to consider that a neutral STH SOPR suggests potential headwinds for an immediate bullish recovery, as the decline in STH SOPR could slow down upward momentum in the short term. Yet, I am heartened by the fact that short-term holders’ demand has managed to absorb much of the selling pressure from long-term holders, preventing sharp price declines.

As Bitcoin currently trades at $97,357 after a slight increase of 1.1% in the past day, I am optimistic but cautious about its future performance. While this uptick has helped regain positive momentum, it remains insufficient to propel BTC back to the six-digit price mark or its all-time high above $108,000.

In jest, I often say that predicting Bitcoin’s market behavior is like trying to catch a greased pig in the dark with bare hands – you never know what you’re going to get! But as they say, fortune favors the bold, and I believe that staying informed, vigilant, and adaptable will be the keys to success in this ever-evolving market.

At the moment, there are considerable changes happening in the Bitcoin market regarding the distribution of supply. This is particularly visible through interactions between investors who hold Bitcoin for extended periods (long-term holders) and those who trade it frequently (short-term holders).

Based on recent findings by CryptoQuant, these types of shifts in the past are frequently associated with either local market highs or even the peak of an entire market cycle, considering the overall state of the market and wider economic circumstances.

Currently, the need from investors with short-term perspectives is significantly influencing Bitcoin’s price consistency as it navigates through market fluctuations.

Long-Term Holders Vs. Short-Term Buyers

According to Darkfost’s analysis on CryptoQuant, it was found that recently acquired short-term Bitcoin holders have been significantly impacting the overall market mood.

Examining short-term purchase periods’ final prices reveals clear patterns of support and resistance at specific levels.

The average prices realized are as follows: $41,000 for the general average, $85,000 for those who held briefly, around $99,000 for holders within a month, approximately $81,000 for holders between one and three months, and roughly $60,000 for those who held for three to six months.

These figures signify crucial psychological and technological price levels at which market players could potentially carry out substantial buying or selling actions, as per Darkfost’s insights.

In simpler terms, the analyst found that the Short-Term Holder Profit Ratio (STH PR) is currently at 1, which means it’s neither showing a significant gain nor loss, following its decrease after Bitcoin reached a record high of $108,000 in its latest surge. The STH PR is an important tool used to understand the short-term holders’ tendency to sell their profits.

As a crypto investor, I’ve noticed that a neutral Spent Output Profit Ratio (SOPR) suggests that recent sales by short-term holders haven’t yielded substantial profits. This diminishes the motivation for extensive selling sprees at today’s prices, offering some relief in the market.

Yet, this impartial position may indicate challenges ahead for an instant surge in bullish gains. Decreasing Self-custody Spent Output Profit Ratio hints at reducing profits from previous transactions, which might dampen short-term price growth.

Even with these difficulties, short-term investors have effectively taken up a significant portion of the selling pressure from long-term investors, thereby averting steep price drops. (Darkfost’s version: In spite of these hurdles, short-term traders have been able to handle a large part of the selling pressure from long-term holders, thus preventing dramatic price decreases.)

To summarize, the high volume sellers (LTHs) have been largely counterbalanced by the buying activity from medium-term holders (STHs). Yet, it’s worth mentioning that the spending pattern of STHs is decreasing, which may slow down a swift bullish rebound. In the near future, there might be a phase of stability or even a more significant downturn.

Bitcoin Market Performance And Outlook

Right now, Bitcoin’s value stands at approximately $97,357, having experienced a modest rise of 1.1% over the past 24 hours.

Although the recent surge in BTC has rekindled some optimism, it’s currently not strong enough to push the cryptocurrency towards the six-digit figure ($100,000) or surpass its previous record high of $108,000.

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2025-01-04 10:16