At the time of writing, Bitcoin [BTC] The average price for active investors was $85,000, with the short-term holder cost basis being $78.9K. The cryptocurrency itself was valued at $77.8K, which after the recent retracement rose to $74.9K on April 29.
In a post on This meant that there was a threat of profit taking by holders as the price moved closer to $80,000 again.
The network’s realized price, which refers to the average cost basis of all Bitcoin holders, was far south at $54.1K.
Bitcoin fell below its realized cost during the previous bear market. And that could happen this cycle too.
Short-term BTC holders are profitable again
For the first time since October, the 30-day moving average of short-term holder-issued output profit loss (STH SOPR) turned positive. In other words, short-term holders of Bitcoin return to breakeven or a slight profit on average.
Crypto analyst Darkfost highlighted how the STH SOPR above 1 meant it was possible the market had reached a turning point. When the benchmark approaches profitability, short-term holders usually sell their holdings and attempt to exit the market, showing a lack of conviction.
This happened earlier in April 2022 and marked the end of a dead cat bounce from $36,000 to $47,000.
It is possible that a similar scenario could happen again, even though the market has remained calm and there has not yet been an aggressive sell-off.
The “Dangerous” Bitcoin Divergence
Analyst Moreno DV pointed out the difference between the price, financing rates and the purchasing volume of customers. Although the price has reached higher lows since February, financing rates have remained largely flat.
The most convincing part seemed to be the declining purchasing volume of customers. Because it is the takers, or aggressive buyers/sellers in the market, who influence prices, a downward trend in taker buying volume indicates that fewer market participants are chasing Bitcoin’s price increase.
This meant that the market was potentially going through an accumulation phase, with major market players absorbing supply through limit orders.
Alternatively, declining buyer buying volume meant the rally reflected the absence of strong sellers, rather than the presence of big buyers, making the move vulnerable.
Final summary
- Bitcoin’s rally faces a handful of cost basis obstacles from $78,000 to $85,000, giving holders an incentive to sell.
- Rallies driven by a lack of sellers rather than the presence of persistent, aggressive buyers are structurally weaker.