Crypto News

Bitcoin short-term holder realized price growth hits a speed bump

The average on-chain acquisition cost is reflected in the realised Bitcoin price. It’s a useful indicator since it provides a baseline valuation for the market at any given time. It sheds light on the investment horizons of the cohorts and how they acutely affect Bitcoin’s price when viewed through the perspective of long-term and short-term holders.
A considerably better metric visualisation is provided by the 7-day change in realised price of these cohorts. A three-year high of 10.62% was reached on March 13th by the 7-day change in realised price for short-term holders. Meanwhile, long-term holders’ 7-day change in realised price was -0.183% on the same day, a small drop from the weeks before.

Realised prices for STH and LTH

Realised prices for STH and LTH are significantly different, which indicates that the market is seeing a large infusion of short-term speculative interest. The realised price of the cohort went risen between March 6 and March 13 because new market players were buying at higher prices than long-term holders. Significant investments were likely made at or near Bitcoin’s peak price of $73,100 on March 13, when the realised price of STH began to grow.
Because they reveal changes in market sentiment and possible pressure points, variations in realised prices for LTHs and STHs are crucial to monitor. When new investors are prepared to put money into the market at greater prices, it can indicate rising optimism or speculative demand. This is especially true when the STH realised price rises in tandem with Bitcoin’s price. There appears to be a hold sentiment among long-term investors, as their holdings remain largely unchanged or even falling in LTH realised price change. This shows that investors may not be willing to move their holdings despite price swings, which helps to solidify the market’s fundamental impression of value.

According to Glassnode’s findings, the market could be about to undergo a turning point. A short-term bullish feeling fueled by speculative trading and new participants drawn by the momentum was shown by the substantial increase in STH realised price change, which occurred alongside a significant increase in Bitcoin’s price. A big rise like the one on March 13th almost seldom persists for more than a few weeks before undergoing a major correction, and that is exactly what transpired last week.

Following Bitcoin’s decline to $61,000 and subsequent rebound to $68,000, the 7-day change in short-term holder realised price fell by 1.469% by Mar. 20. The precipitous decline indicates that the market has entered a consolidation period as speculative exuberance has waned. Market sentiment has become more cautious as data shows that the buying enthusiasm and optimism that caused the substantial price gain of STH realised and, consequently, Bitcoin, have diminished.

This data point can be interpreted in multiple ways. One possible explanation for the slowing of the rate of change in the realised price of STH is that new capital is not pouring in as quickly at higher valuation levels. The fact that the STH realised price move and Bitcoin’s market price both fell at the same time may indicate that short-term holders are putting less pressure on the sell side.

In general, when the realised price of STH reaches a new high, as it did on March 13, it may be a sign that short-term holders are eager to cash out their gains. As the market processes the fallout from earlier speculative trading, however, this pressure can eventually ease, stabilising prices—though at a lower level than the recent highs.

As the market processes its recent gains, it may enter a phase of recalibration, which might lead to the formation of resistance at this price level. Because of the stabilising effect they have on the market when long-term holders remain calm in the face of uncertainty, their actions will remain an important metric to track.

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