After a slight price rebound last week, Bitcoin (BTC) rose above $98,000, with market bulls aiming for a return to the $100,000 price region. Interestingly, a report by CryptoQuant analyst Darkfost revealed an increase in short-term holder demand that coincided with the recent price rise.
Bitcoin STH appetite removes LTH selling pressure
In a Quick post On Friday, Darkvost reported that long-term Bitcoin holders are seeing a sell-off offset by increased demand from short-term holders. Depending on market conditions, Darkvost explains that sustained asset transfers historically only occur after a local market peak or peak of a bull cycle indicating potential concern for Bitcoin following the price correction in December.
In analyzing the asset’s next move based on short-term holder activity currently driving market demand, Darkfost identified $85,000, the realized price of STH, as a critical price area.
For context, the realized price of STH represents the average acquisition price of all BTC held by short-term holders. It is often translated into a physiological zone capable of acting as a support or resistance zone.
As Bitcoin continues its upward trend, $85,000 should be considered a vital support level that can sustain the bull market in the event of a retest. Based on data for longer STH holding periods ranging from 1 week to 6 months, other important support levels include $81,000 and $60,000.
However, amid BTC’s recent rebound, a major resistance awaits at $99,000, which represents the realized price of STH that appeared in 1 week – 1 month. This is because as Bitcoin approaches $99,000, these new entrants are likely to sell in order to recoup their initial investment which could prevent further growth.
SOPR shows no profit to shareholders in the short term
In other developments, Darkvost also notes that the SOPR for short holders is currently neutral at 1 following Bitcoin’s bounce from $108,000 in December.
This suggests that short-term holders are not selling for dividends and are likely to ease selling pressure. With the LTH sell-off also being countered by rising demand from these STHs, market liquidity is likely to decline which could prevent a full bullish recovery for the market.
Therefore, Darkfost expects BTC to remain consolidating with the possibility of further price correction.
At the time of writing, Bitcoin is trading at $98,030 after a 1.27% gain over the past 24 hours. At the same time, the asset trading volume decreased by 15.47% and reached $36.26 billion.
Featured image from CNN, chart from Tradingview
Comments are closed, but trackbacks and pingbacks are open.