- BTC recovered slightly in the past 24 hours, gaining 1.20%
- Bitcoin risks a massive sell-off if it remains below the realized price of $63,000 for short-term holders
Bitcoin last week [BTC] has seen a sharp decline on the charts, dropping 5.61%.
However, the past 24 hours have been different, with the same trend following the cryptocurrency’s generally bullish trend of the past few weeks. At the time of writing, BTC was trading as high as $62,099, after rising 1.2%.
However, despite this uptick, key stakeholders in the crypto market are concerned. Especially above the realized price of the short-term holders. One of those voicing their concerns is the popular crypto analyst Ali Martinez. He even predicted a potential sell-off by short-term holders if BTC does not regain the $63,000 level.
What does the market sentiment say?
In his analysis, Martinez stated that if Bitcoin continues to trade below the price realized by short-term holders, the market will experience greater selling pressure.
Source:
According to this analysis, BTC has been trading below this level since June 22, 2024. Therefore, if the price remains below this level, these holders who have held BTC for less than 155 days will sell to avoid further losses that will result in a cascading sale. -out.
Therefore, the market needs to maintain this level around $63,000 to determine the next outcome.
As long as BTC remains below the realized price for short-term holders, the likelihood of more selling pressure increases. If more short-term holders panic and sell, it could push prices lower, potentially leading to mass liquidations of leveraged positions, exacerbating the downtrend.
Simply put, Bitcoin needs to recover $63,000. This will encourage short-term holders to hold on to their BTC, waiting for further gains.
What do the graphs say?
Notably, the analysis provided by Martinez also shared a worrying market finding. However, it is essential to determine what other market fundamentals suggest.
Source: CryptoQuant
The first indicator to take into account is Bitcoin’s Fund Flow ratio, which has fallen since September 30. The fund flow ratio dropped from 0.08 to 0.05, indicating less BTC is being transferred to exchanges.
This means that investors are moving their assets into private portfolios, rather than selling them. This often hinted at more bullish sentiment as holders do not liquidate their positions in the short term.
Source: Coinglass
Additionally, liquidations for long positions since the beginning of October fell from $123 million to $2.47 million at the time of writing.
Such a reduction implies that many investors are anticipating a rise in the price. So they pay a premium to hold on, even during market downturns.
Source: Cryptoquant
Similarly, Bitcoin’s NVT ratio fell from 42.8 to 24.8 over the past week. Simply put, BTC may currently be undervalued relative to its network activity. This means that the market has not yet caught up with the rising activity.
In conclusion, the prevailing market conditions may cause BTC to make even more gains on the price charts.