Recent on-chain data is suggestive Current problems of Bitcoin it may not be over as short-term holders continue to feel the heat. Bitcoin has failed to recover much after last week’s price drop, leaving many investors wondering whether to expect further declines in the coming weeks. Notably, the data reveals that short-term holders are left wanting more, especially as Bitcoin continues to trade below its price.
Bitcoin Holders Continue to Trade Below Short-Term Pain Point
Short-term holders are often known to buy into Bitcoin only a few weeks before selling for a profit. Interestingly, earlier this month, Bitcoin once again fell above $71,000 in what many owners see as the start of another extended uptrend. This short break above $71,000 saw many short holders jumping on the bandwagon, hoping to catch a wave at the top.
However, things haven’t gotten any better since then, as Bitcoin has steadily fallen to a 30-day low of $63,622 in the past 24 hours, according to data from CoinMarketCap. Not to mention the miners surrendered again they filled the market with more Bitcoins in the past few days, which has further contributed to the price drop.
According to on-chain data shared on social media site X by crypto analyst Ali Martinez, short-term holders are starting to feel the pressure. Interestingly, this pressure stems from Bitcoin trading long below its $66,200 leased price. Their cost basis or “realized price,” which is the average price for which they acquired their Bitcoin holdings, now exceeds the current market value. In other words, they are sitting on unrealized losses.
Short term #Bitcoin the owners are starting to feel the pressure as $BTC continues to trade below their proposed price of $66,200! pic.twitter.com/q2tTyrApnf
– Ali (@ali_charts) June 22, 2024
What Does This Mean?
Short-term owners are faced with a difficult choice at this critical time: if they cut their losses and sell, or take it out and HODL. While it is impossible to say what actions individual investors may take, their position as short-term holders suggests that they sell more often than not. This may lead to a another drop in price, at least in the short term. On the other hand, long-term holders are more inclined to watch this dip as a temporary blip and cling to their property.
At the time of writing, Bitcoin is trading at $64,381 and needs a big bull effort to keep it from falling further. According to the weekly newspaper report from blockchain analytics company CryptoQuant, Bitcoin right now is in danger of falling to $60,000.
As mentioned earlier, on-chain data shows that Bitcoin miners have been selling their stuff. Data for IntoTheBlock shows that miners sold more than 30,000 BTC worth $2 billion at the fastest rate in more than a year since early June.
Featured image from Shutterstock, chart from TradingView
