The Bitcoin (BTC) market is currently experiencing significant shifts in supply dynamics, with notable activity between long-term holders (LTHs) and short-term holders (STHs).
According to the latter analysis According to CryptoQuant, historically, such transitions have often marked local market tops or even cycle peaks, depending on the overall market environment and broader economic conditions.
Currently, demand from short-term holders continues to play a crucial role in supporting Bitcoin’s price stability amid ongoing market volatility.
Long-term holders versus long-term holders Short-term buyers
CryptoQuant analyst Darkfost’s analysis found that short-term holders, especially those who bought Bitcoin in recent months, are actively influencing market sentiment.
By analyzing the realized price data from various short-term acquisition periods, clear support and resistance levels become apparent.
These realized price levels include $41,000 for the overall average realized price, $85,000 for short-term holders overall, $99,000 for holders within one week to one month, $81,000 for one to three months, and $60,000 for three to six months.
These numbers reflect key psychological and technical price points at which market participants can make important buying or selling decisions, Darkfost said.
The analyst revealed that the Short-Term Holder Spent Output Profit Ratio (STH SOPR) currently remains neutral at 1, following a decline from Bitcoin’s last rally, which pushed the price to an all-time high of $108,000. The STH SOPR serves as an important benchmark to evaluate the profit-taking behavior of short-term holders.
A neutral SOPR indicates that recent selling activity by short-term holders has not been significantly profitable, reducing the incentive for widespread sell-offs at current price levels.
However, this neutral stance signals potential headwinds for an immediate bullish recovery. The decline in the STH SOPR signals declining realized gains, which could slow upside momentum in the near term.
Despite these challenges, demand from short-term holders has managed to offset much of the selling pressure from long-term holders, preventing sharp price declines. Darkfost wrote:
In conclusion, the selling pressure of LTHs has so far been fairly well absorbed by the buying pressure of STHs. However, we note that the STH SOPR is declining, which could hinder an immediate bullish recovery. In the short term, a period of consolidation or even a deeper correction may occur.
Bitcoin Market Performance and Outlook
Meanwhile, Bitcoin is currently trading at a price of $97,357, after rising slightly by 1.1% in the past day.
While this rebound has allowed BTC to regain positive momentum in recent weeks, it remains insufficient to propel the cryptocurrency back to its six-figure price range or all-time high above $108,000.
Featured image created with DALL-E, Chart from TradingView