Bitcoin Crashes To $64,000: Will This Historical Support Hold?
26 Julho 2024 - 2:00AM
NEWSBTC
On-chain data shows Bitcoin is retesting a historically significant
support level after the latest plunge in the asset’s price has gone
through. Bitcoin Is Currently Retesting The Short-Term Holder
Realized Price As explained by CryptoQuant community manager
Maartunn in a new post on X, BTC has returned to the Realized Price
of the short-term holders with its drawdown. The “Realized Price”
here refers to an on-chain indicator that, in short, keeps track of
the acquisition price or cost basis of the average investor in the
Bitcoin sector. When the value of this metric is greater than the
cryptocurrency’s spot price, the holders are in a state of net
unrealized loss right now. On the other hand, being below the
asset’s value implies dominance of profits in the market. Related
Reading: Cardano Among Alts Likely To See Price Boosts, Santiment
Says In the context of the current discussion, the Realized Price
of the entire market isn’t of interest, but that of only a segment
of it: the short-term holders (STHs). The STHs include all
investors who bought their BTC within the past 155 days. Now, here
is a chart that shows the trend in the Bitcoin Realized Price
specifically for the STHs over the past month: The above graph
shows that the Bitcoin spot price has declined towards the STH
Realized Price in its latest drawdown. This would mean that the
break-even point of the STHs is now being retested. Historically,
this retest has proven to be quite important for the
cryptocurrency. The line has served as a transition boundary
between bearish and bullish periods. Generally, when the asset is
in the region above the STH Realized Price, retests of the
indicator lead to it reversing back up. Similarly, the line acts as
resistance when the coin is under it. The explanation behind this
curious pattern may lie in investor psychology. Related Reading:
Ethereum Spot ETF Hype: ETH Whale Activity 64% More Than BTC The
STHs are the fickle-minded hands of the market, who easily react to
movements in the asset. As such, they are naturally sensitive to
retests of their cost basis and may make moves when they happen.
When the atmosphere in the sector is bullish, the STHs usually look
at their cost basis as a buying opportunity. This is why the level
acts as support during bullish periods. In times of bearish
sentiment, these investors may panic sell at their break-even
instead, thus providing resistance to the asset. The Bitcoin spot
price had managed to break through this resistance earlier in the
month, but with the plunge, it’s now retesting it again. It remains
to be seen if support holds here, confirming the prevalence of a
bullish mentality, or a dip under it happens, thus suggesting a
transition to a bearish market. BTC Price At the time of writing,
Bitcoin is trading at around $64,800, down more than 2% over the
past 24 hours. Featured image from Dall-E, CryptoQuant.com, chart
from TradingView.com
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