- If history repeats itself, Bitcoin distribution could occur around $45,000.
- The price of the coin may fall below $37,000 before another major uptrend occurs.
The $35,000 region may have become the new accumulation zone Bitcoins [BTC] short-term holders (STH), according to Axel Adler Jr. Adler mentioned this in a post on X (formerly Twitter) on November 26.
The data analyst and research expert used historical data of the Bitcoin supply ratio from one week to twelve months to arrive at his conclusion. The chart shared by Adler shows that STH started collecting $18,000 around February.
Short-term players look on the bright side
However, it wasn’t until BTC reached $28,000 that these holders started making profits. The on-chain data shows that STHs started to rise to $35,000 around the first week of November.
So if history repeats itself, widespread distribution would not occur until Bitcoin reaches $45,000.
The $35K level is the new starting level for short-term holding accumulation. It is calculated as the ratio Supply 1w-6m/6m-12m.
If the situation repeats, the distribution will start at the $45,000 level. pic.twitter.com/d6OICIoeUU
— Axel 💎🙌 Adler Jr (@AxelAdlerJr) November 26, 2023
But what are the chances of Bitcoin reaching that price before the year ends? To assess this potential, AMBCrypto checked Bitcoin’s gains, which at the time of writing stood at 83.13%, according to CryptoQuant. This metric dropped from November 25, when it stood at 84.36%.
An increasing one trend of the benchmark means that investors are starting to adopt it gain. This could result in selling pressure, which could cause a drop in the price of Bitcoin.
But since the profit supply has declined, it means BTC has a chance to recover before the year ends. Although $45,000 seems a bit far away, BTC may have a chance to reach $40,000. But for that to happen, the coin needs to retest $38,000 before November ends.
Source: CryptoQuant
BTC’s decline offers opportunities
From the technical perspective, the H4 chart of BTC/USD showed that the Relative Strength Index (RSI) had fallen to 46.23. This reading indicates that sellers were dominant in the market. So BTC is unlikely to recover $38,000.
However, if the RSI value drops below 40.00, market players may see this as an opportunity to buy Bitcoin at a discount. Should accumulation begin around this point, buying pressure could push BTC towards $40,000.
This optimistic This statement was also confirmed by the Exponential Moving Average (EMA). At the time of writing, the 20 EMA (blue) was above the 50 EMA (yellow), indicating that BTC could trade well above the $37,000 region within weeks.
Source: TradingView
Another metric that deserves attention is the Spent Output Profit Ratio (SOPR). The SOPR indicates the degree of profit realized by both Long-Term Holders (LTH) and STH. Higher values of the ratio indicates that LTH has issued higher profits than STH.
Is your portfolio green? look at the BTC profit calculator
If this is the case, this is a sign of a local market top. If it is the other way around, it means that a coin potentially has more upside potential. At the time of writing, the SOPR had increased. But it was nowhere near the highs of November 1.
Source: CryptoQuant
Therefore, if short-term holders continue to hold their supply-to-earnings ratio positions, BTC could soon trend upward.