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- Bitcoin’s short-term holders held the market with a net position change value of +750k.
- BTC fell 12.37% last week.
Since reaching $108k, Bitcoin [BTC] is struggling to maintain upward momentum. As such, BTC has been trading in a consolidation range between $92,000 and $97,000.
At the time of writing, Bitcoin is trading at $93,905, down 2.18% on the daily charts. Moreover, the cryptocurrency is down 12.37% on the weekly charts.
This dip has left most short-term holders in losses, including those who bought Bitcoin in November. The widening loss margins among short-term bonds have analysts considering the next step.
Bitcoin’s LTH vs STH net position change
According to cryptoquant, the 30-day net position change for long-term holders (LTH) has turned negative, reaching -750k BTC.
Source: CryptoQuant
Despite this change, Bitcoin prices have managed to remain strong and not experience a sharp decline. This is because short-term holders (STH) have continued to accumulate even as BTC rallied to a new ATH.
Source: CryptoQuant
The net position change for short-term holders (STH) increased to a positive value of +750,000 BTC.
As short-term investors continued to accumulate as BTC prices rose, the STH SOPR turned negative. This indicates that STH holders are operating at a loss.
If short-term holders suffer a loss, they have two options: hold and wait for BTC prices to recover, or buy at lower prices. If STH demand remains strong and long-term holder (LTH) demand is neutral or positive, this could create positive momentum for BTC.
However, if STH decides to sell at a loss, it could create selling pressure and drive prices down further. The direction short-term holders take will influence BTC’s price trajectory.
Source: CryptoQuant
From the age ranges spent on output, we can see that short-term holders are actively selling. So short-term holders spent more coins than LTH, with the value of coins held for one day reaching 56 million and coins held for a week reaching 9 million.
Source: CryptoQuant
As such, a spike in the exchange rate supply ratio has occurred over the past week. A surge in exchange supply suggests that these issued coins are going public, causing traders to transfer more Bitcoin tokens to exchanges to sell or prepare to sell them.
This implies that there is a lot of speculative trading among STH traders and they even sell at a loss to acquire at lower rates.
Implications for BTC?
As noted above, short-term holders control the market. As such, BTC risks facing higher selling pressure from this cohort, which could in turn drive down prices.
Read Bitcoin (BTC) price prediction 2024-25
With STH actively selling their tokens, it shows their lack of market confidence and proceeds to buy at a lower level after selling at a loss. If their net position changes and becomes negative, like long-term holders, Bitcoin could fall further.
If this bearish sentiment continues, BTC could fall to $92,130. However, if STH demand continues, BTC will look to recover towards $95,800.