The Bitcoin (BTC) market is currently experiencing significant shifts in supply dynamics, with notable activity among long-term holders (LTHs) and short-term holders (STHs).
According to another analysis From CryptoQuant Historically, such shifts have often signaled local market tops or even cycle tops, depending on the overall market environment and broader economic conditions.
At present, short-term holder demand continues to play a crucial role in supporting Bitcoin price stability amid ongoing market volatility.
Long Term Holders Vs. Short term buyers
Analysis by CryptoQuant analyst Darkvost revealed that short-term Bitcoin holders, especially those who have acquired Bitcoin in recent months, are actively influencing market sentiment.
By analyzing realized price data for various short-term holding periods, distinct support and resistance levels become apparent.
These realized price levels include $41,000 for overall average realized price, $85,000 for overall short holders, $99,000 for short holders in one week to one month, $81,000 for one to three months, and $60,000 for three To six months.
These numbers reflect key psychological and technical price points where market participants may make important buy or sell decisions, according to Darkfost.
The analyst revealed that the Short Term Thread Profit Ratio (STH SOPR) currently remains neutral at 1 after falling from Bitcoin’s recent rally, pushing its price to an all-time high of $108,000. STH SOPR serves as a key measure to evaluate the profit-taking behavior of short-term stockholders.
A neutral SOPR report indicates that recent selling activity from short-term holders has not been significantly profitable, reducing the incentive for a broad sell-off at current price levels.
However, this neutral stance indicates potential headwinds for an immediate bullish rebound. A decline in STH SOPR indicates diminishing profits being made, which could slow down the upward momentum in the short term.
Despite these challenges, short-term bondholder demand was able to absorb much of the selling pressure from longer-term bondholders, preventing sharp price declines. Darkfoust wrote:
In conclusion, selling pressure from LTHs has so far been well absorbed by buying pressure from STHs. However, we note that the STH SOPR is declining, which could hinder an immediate bullish recovery. In the short term, a period of consolidation or even a deeper correction may occur.
Bitcoin market performance and forecast
Meanwhile, Bitcoin is currently trading at $97,357 after recording a slight increase of 1.1% in the past day.
While this rally has helped BTC regain positive momentum in recent weeks, it is still not enough to push the cryptocurrency back to the six-figure price tag or its all-time high above $108,000.
Featured image created with DALL-E, chart from TradingView