The Bitcoin [BTC] Spot demand has remained relatively subdued as prices approached the $81,000 resistance zone in recent days. AMBCrypto had warned that negative financing rates and higher leverage amplified the risks of price volatility.
Long-term holders were not under heavy pressure, but the price was a test of the $80.2k price realized by short-term holders. This area has acted as resistance and the BTC bulls have not yet managed to turn the STH cost base into support.
Meanwhile, bearish price trends have caused Bitcoin Treasury companies to incur significant unrealized losses. It has prompted some, like miner Riot Platforms, to start selling.
Bitcoin: $80,000 can reduce immediate risk
While long-term holders remained comfortable, increasing speculative positioning could increase short-term price volatility. Short-term bonds have been under significant pressure over the past three months.
The STH loss pressure reflects the intensity of unrealized losses: the higher the metric, the more underwater this cohort is. The measure spiked during the early February crash, and short-term investors faced large unrealized losses in April.
The recent rally has softened their position and the loss pressure has been 0% for five consecutive days.
This has the potential to alleviate selling pressure from underwater short-term holders. However, a Bitcoin price drop below the $78k-$79k region would revive STH loss pressure.
The analyst also used the declining share percentage of short-term holders’ supply to conclude that the share of young coins in the supply is shrinking. This factor also alleviated the risk of selling to recent buyers.
It is still too early to confirm market strength
Analyst Amr Taha noted that short-term holders have realized more than 7,000 BTC five times since mid-April. Despite these profit-taking, Bitcoin has not experienced any significant setback from the psychological level of $80,000.
Alphractal CEO Joao Wedson reiterated the warning that it was too early to conclude that the bull market had returned. The realized cap momentum metric has not yet risen above zero.
Because the measure uses capital flow in its calculations, the inability to move into positive territory despite the rally in recent months has been concerning for bulls.
Even as pressure on short-term losses fades and BTC absorbs supply above $75,000, a previous resistance, investors should remain cautious ahead of a bear market rally.
Final summary
- Short-term holder loss pressure, combined with a reduced supply of young coins, could help alleviate selling pressure.
- The realized cap boost cautioned investors to remain cautious ahead of a bear market rally.