Bitcoin Rebounds After Nearing Cost Basis Of Short-Term Whales

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After dipping below $66,000, Bitcoin has bounced back due to purchasing activity from short-term holder whales near their average acquisition price.

Bitcoin Drawdown Had Nearly Put Short-Term Whales Under Pressure

According to a CryptoQuant analysis, the price of Bitcoin came close to equaling the average purchase price for short-term whale investors during the latest decline. However, it still managed to stay above this threshold.

In simpler terms, “Realized Price” is an on-chain metric representing the typical purchase cost for Bitcoin investors in the market.

If the cryptocurrency’s spot price is higher than this figure, it indicates that investors have yet to realize their profits. Conversely, a price below this level suggests that the market as a whole is currently experiencing losses.

During our ongoing conversation, it’s not important to focus on the total realized price of the entire Bitcoin market. Instead, let’s zero in on the price experienced by a specific group: the short-term holder (STH) whales.

Investors who purchased Bitcoin within the previous 155 days are referred to as Small-Term Holders (STHs). On the other hand, Whales are defined as entities possessing more than 1,000 BTC. Consequently, Large Investors who bought during the last five months fall under the category of STH Whales.

In simple terms, the Realized Price for this particular group signifies the average purchase price for “whales” during the previous five months. This price is significant because it represents a price point at which the cryptocurrency was previously traded within this specific timeframe.

Here’s a chart illustrating the past ten years’ development in the Realized Price of Bitcoin for prominent holders (STH whales).

Bitcoin Rebounds After Nearing Cost Basis Of Short-Term Whales

Based on the graph’s representation, the Realized Price of STH whales has significantly increased in tandem with Bitcoin’s strong market rally this year. This observation aligns logically, considering new investors or STHs entering the market must purchase at elevated prices as Bitcoin’s value continues to escalate.

In addition, once securities held by investors surpass the 155-day threshold (purchased at lower prices), they depart from the grouping, causing the overall average to climb higher.

The investors who have held onto their assets for a long time are categorized as the Long-Term Holder (LTH) group. On the same graph, the quant has provided information about the Realized Prices for these LTH investors as well.

These experienced whale investors seem to have purchased their shares for only $21,500 each. As a result, they stand to gain substantial profits from their long-term investment. In contrast, the STH (likely short for “Shark Tank Holder”) whales have a realized price of $60,700 per share.

In simpler terms, when Bitcoin experienced a price drop not too long ago, it nearly touched a significant threshold. Previously, reaching this point has triggered market responses, particularly during bull markets. These responses usually involve buying activity. It’s possible that this trend occurred again, leading to Bitcoin’s recovery around $60,700.

BTC Price

With its latest rebound, Bitcoin has so far managed to recover back towards the $66,500 level.

Bitcoin Rebounds After Nearing Cost Basis Of Short-Term Whales

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2024-04-15 18:04