Journalist
Posted:
- Bitcoin erasing recent gains may not be the end of a short-term downtrend.
- Miners have also been selling, indicating that delays will not appear anytime soon.
Invest in Bitcoin [BTC] has long been associated with potential profits. However, current market dynamics may have raised concerns about the possibility of losses. But that can only be the case if investors decide to accumulate the coin for the short term.
Read Bitcoins [BTC] Price Prediction 2023-2024
For on-chain analysts crypto solar moonthose bullish on BTC price action may need to consider the realized price of the Short-Term Holders (STH), rather than rushing into a decision.
Not the right time to make a profit
Sun moon, who published his take on CryptoQuant believed that Bitcoin could take another step up the charts.
The price realized by STH is the average price of the STH holder’s BTC supply, valued on the day each coin was last traded in the chain. Often considered the cost basis for short-term holders, an increase in the metric or a reversal in the realized price of the long-term holder (LTH) indicates an upward trend.
Source: CryptoQuant
However, the benchmark had dropped, signaling the start of another BTC price drop. Previously, Bitcoin had hit $28,000 thanks to Grayscale victory in court. Unfortunately only the walk took a whileas the coin seemed very close to the value it had before the rally.
And because the STH sometimes acts as support or resistance, Sunmoon concluded the following:
“The recent collapse in the realized price of short-term holders has led to a downtrend, and the realized price of short-term holders is acting as a strong resistance. The downtrend is likely to continue for a while, so those who buy early are likely to lose money.”
Miners take some of the blame
Another reason why BTC could fall again could be related to the actions of miners. IT Tech, another pseudonymous analyst on CryptoQuant explained that selling pressure was limited to investors only.
Instead, miner transfers to spot exchanges have been on the rise for some time. The analyst noted that:
“In recent times, every major or minor price drop has occurred as miners send their Bitcoins to SPOT exchanges. This action naturally increased the sales pressure, which eventually led them to sell on the market.”
To come to the conclusion, IT Tech used the seven-day Moving Average (7-day MA) miner wallet to exchange statistics. Miners moving their coins to the exchanges also includes the purpose of selling to cover the costs or in preparation for a possible sale.
Is your wallet green? look at the BTC Profit Calculator
Usually the sales actions include the immediate need to cover expenses or make excess profits by selling at the price they consider overvalued.
Source: CryptoQuant
From the chart shared above, it can be seen that there were numerous spikes on several occasions. This was a confirmation of miners’ intention to sell BTC. At the time of writing, Bitcoin was back below $26,000, losing 4.64% of its value in the past 24 hours.