- Losing the historical support level puts BTC in pole position for another decline.
- The MVRV Long/Short difference revealed that the coin’s price could recover later in the cycle
Bitcoin [BTC] has fallen below the Short Term Holder (STH) realized price, indicating that the price could drop to $61,000 or below $60,000 in the coming days.
According to Glassnode, Bitcoin’s STH realized price at the time of writing was $64,372, while BTC’s value was $64,066. Also known as the on-chain cost basis, the metric is the average value of the STH Bitcoin supply.
Here it is worth pointing out that the price realized by STH is valued on the day each coin last traded on the chain. Typically, STH are those who have purchased BTC no later than the last 155 days.
It looks like Bitcoin is going down
When Bitcoin rises above the Realized Price, it increases the chance of a price increase. This is because the metric acts as support for the price of the crypto. However, a trap below the threshold gives rise to the possibility of a correction. This was also clearly visible in previous market cycles.
For example, in 2018, the cryptocurrency fell below its realized price of $11,012. A few months later, the price of the coin dropped to $8,455. In the final days of 2021, when Bitcoin’s price was $48,962 and its reading was over $53,000, it didn’t take long for the value to drop to $42,306.
Source: Glassnode
Going by this historical data, BTC’s value is at risk of another correction despite its 7.82% decline over the past 30 days.
In addition, AMBCrypto analyzed the long/short difference between market value and realized value (MVRV). This metric uses the ratio of the number of long-term holders to the new money coming into Bitcoin to determine potential market anomalies.
It’s still a bull market!
If the MVRV Long/Short rises, it means that new money is entering the currency market. However, a decline implies something different. At the time of writing, the statistic had dropped to 21.16%.
This is a sign that BTC has did not have a high level of capital recently. Therefore, the price of the coin could fall in the short term.
However, the metric also shows whether a cryptocurrency is in a bear or bull phase. Since the result was positive, it means that Bitcoin is still in a bull market. So if the price drops to $61,000, the value could be much higher later in the cycle.
Furthermore, the Relative Strength Index (RSI) on the 4-hour chart stood at 40.87. Here the RSI measures momentum and shows whether it is bullish or bearish. The value for the same figure was below 50 – a sign of bearish momentum.
Source: Santiment
Realistic or not, here is the market cap of BTC in ETH terms
Thus, BTC’s bearish forecast could be validated. That said, an analyst from X – Crypto Caesar – predicted that the decline could be a buying opportunity before a new rally begins. He wrote,
“Bitcoin’s short-term realized price generally acts as support in uptrend markets (see chart). Currently sitting at $63,900. Historically, this has been a good BTFD opportunity before more bananas mode.”