- Short-term holders began selling their holdings, taking losses as prices fell.
- The number of Ordinals buyers grew, indicating increasing interest in the Bitcoin ecosystem.
Bitcoins [BTC] The price went through a period of stagnation after the price plummeted following the adoption of Bitcoin ETFs. Many have tried to speculate what happens to BTC next.
Here for a good time, not for long
CrazzyBlockk, an analyst from CryptoQuant, sheds light on the crucial role that short-term holders can play in shaping BTC’s path forward.
Of particular concern is the notable 50% drop in profits for these short-term holders, evidenced by statistics tracking both unrealized and realized gains/losses within the Bitcoin network.
50% profit drop of short-term holders:
“Typically, such significant reductions in the average profits of short-term holders, given their sensitivity to short-term market conditions, provide a strong case for selling pressure or exit liquidity.”
Through @Crazzyblockk… pic.twitter.com/KsgZiG20Us— CryptoQuant.com (@cryptoquant_com) January 19, 2024
From its peak of $44,000 to today, Bitcoin’s price decline has eroded more than half of the gains of short-term holders.
Remarkably, numerous holders who have held Bitcoin for less than a month are currently exiting the market at a financial loss. Such a substantial decline in the average profits of short-term holders, given their increased sensitivity to short-term market conditions, serves as a compelling reason for potential selling pressure or liquidity exits.
In light of this prevailing bearish sentiment in the Bitcoin market, analysts are keeping a close eye on a crucial price level that could act as a support zone for Bitcoin. This crucial range is identified within the $38,000 to $36,000 spectrum.
The expectation of a drastic price correction is rooted in the observable conditions in which short-term bonds experience a notable decline in profitability, adding to the complexity of the prevailing market dynamics and signaling potential shifts in investor sentiment.
On the plus side
However, there may be some positive factors that could help BTC support its price levels. For example, in recent weeks there has been a huge interest in BTC ordinal numbers.
According to CryptoSlam data, the number of unique buyers of Bitcoin Ordinals has grown by 69.93% over the past month. The increasing interest in Ordinals could help the Bitcoin ecosystem grow.
Source: Crypto Slam
Read Bitcoin’s [BTC] Price forecast 2024-25
At the time of writing, BTC was trading at $42,507.73 and the price was down 0.65% over the past 24 hours.
The volume of trading also fell during this period.
Source: Santiment