Bitcoin’s current price movement is showing some hesitation, as it struggles to climb back above important thresholds. As of now, the cryptocurrency is trading under $82,000, showing a slight daily increase of 0.3%, yet it’s still about 24.3% shy of the all-time high of over $109,000 that was recorded in January.
Against this backdrop, certain price levels are proving critical, especially for short-term holders (STHs)—those investors who’ve held onto Bitcoin for less than six months.
Now, analyzing the market landscape, Yonsei Dent from CryptoQuant highlights a crucial resistance band between $86K and $90K. This area is significant because many short-term investors are currently facing losses. Bitcoin’s ability to push past this zone will be pivotal in determining if the currency can regain its upward momentum or if it will continue trending downwards.
According to Dent, the Realized Price metric is a key factor here. It reflects the average buying cost for Bitcoin holders, serving as an indicator of where the support and resistance lines might form—essentially showing where investors could break even or potentially incur losses.
Right now, Bitcoin is trying to break the $83,000 barrier, but the Realized Price for short-term holders, those holding for just one week to six months, averages at $91,800. With so many recent buyers currently in the red, there’s selling pressure as they look to cut their losses.
Moreover, for holders who bought their Bitcoin three to six months ago, the average acquisition cost is $86,100. This group controls a substantial portion of the market’s Realized Cap for short-term holders, which means their trading decisions could significantly sway Bitcoin’s price trajectory.
As Bitcoin hovers in the $86,000 to $90,000 band, the market is in a delicate state. Many short-term investors are likely to sell if they can break even, which might spike volatility. Should Bitcoin fail to surpass this resistance, there’s potential for a downward push.
Looking at the other end, the Realized Price for long-term holders, six to twelve months down the line, is pegged at $63,700, close to a strong historical support of $64,000. According to Dent, if there’s substantial buying demand to balance out the selling, Bitcoin could break free from this price range and pave the way for a healthier market climb.
However, if the pressure from short-term sellers becomes too intense, Bitcoin might dip back to test its lower support levels before showing any meaningful recovery. Dent observes:
"As Bitcoin navigates the $86K → $90K range, STHs eyeing a break-even exit could stir up market volatility. The critical question remains whether the buying demand can withstand this pressure. We’ll need to watch closely to see how the market reacts."
Featured image generated by DALL-E, and chart sourced from TradingView.
