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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