On-chain data shows Bitcoin failed the latest retest of a historically important indicator, a sign that the bearish trend may be taking over.
Bitcoin rejected from cost base for short-term holders
As one analyst pointed out post At X, BTC is currently facing resistance at realized prices for short-term holders. “Acquisition price” here refers to the average investor’s cost basis or acquisition price in the Bitcoin market.
If the spot price of a cryptocurrency falls below this level, it means that the entire investor is currently in a situation of net loss. On the other hand, if assets are trading above this indicator, it suggests that the overall market still has some upside potential.
In the context of the current discussion, the actual price of the BTC sector as a whole is not relevant, but only the actual price of a specific segment, “Short Term Holders” (STH).
STH is an investor who purchased a coin within the last 155 days. Members of this group generally have weaker beliefs, so they can be very sensitive to market changes.
Here is a graph that shows the actual price trend of Bitcoin over the past few years, especially regarding these STHs.
The asset appears to have recently retested this line. sauce: @jimmyvs24 of X
As shown in the chart above, the actual price for short-term Bitcoin holders is currently around $27,800. During its recent recovery attempt, BTC retested this line but ultimately found significant resistance.
This indicator actually has a lot of history of acting as both resistance and support for the spot price of cryptocurrencies. Generally, this line helps the asset in bull markets, but hinders it in bear markets.
From the chart, we can see that the asset price encountered resistance at this mark and stayed below that value throughout the 2022 bear market. However, during the bull market that began in January of this year, the coin was finally able to find a break.
The real price of STH then moved towards the support level as it led the asset during the March and June retests. However, during the August crash, Bitcoin fell back below the line and has not been able to break above it since.
Given the importance of the line, the most recent retest of the indicator was very significant, so the fact that it failed could mean that a bearish trend is underway, so the asset This could be a worrying signal for Further changes are possible.
Retests such as the real price of STH may take some time to finish properly, but the rejection caused Bitcoin to drop significantly to the $26,700 level, so this is confirmation that the asset is indeed at this level. It may be. Bar refused.
The price of the coin seems to have gone down in the last few days. sauce: BTCUSD on TradingView
Featured images from Shutterstock.com, charts from tradingview.com, glassnode.com