Over the weekend, Bitcoin’s price momentum appeared to slow, unable to sustain the upward surge observed on Friday, October 4. The leading cryptocurrency continues to hover around the $62,000 mark, reflecting a modest 0.3% decline over the past 24 hours.
Recent on-chain data suggests that Bitcoin’s price might persist in its sluggish performance, largely driven by pressure on short-term holders. Notably, Bitcoin remains traded below the realized price of short-term holders (STH). In a recent post on the X platform, crypto analyst Ali Martinez identified $63,000 as the realized price for Bitcoin short-term holders, underscoring the significance of this level for the asset’s long-term prospects. The short-term holder realized price metric gauges the average price at which short-term investors acquired their BTC.
When Bitcoin’s spot price exceeds the short-term holders’ realized price, it indicates that most recent investors are experiencing profits. This usually encourages traders to accumulate more coins, fostering positive market sentiment and potentially driving an upward price movement. Conversely, if the spot price drops below the STH realized price, it signifies that most short-term holders are facing unrealized losses. In such circumstances, some investors might seek to minimize their losses by selling off their assets, exerting downward pressure on the price and potentially triggering further sell-offs.
Ali Martinez pointed out that Bitcoin has been trading below the short-term holders’ realized price since June. With the current STH realized price set at $63,000, Bitcoin seems vulnerable to further decline, particularly in the short term.
Despite this, the overall outlook for Bitcoin’s price in the last quarter of 2024 remains optimistic. According to CryptoQuant’s latest weekly report, the behavior of Bitcoin holders in the current cycle mirrors patterns observed during the 2016 and 2020 halving years, signaling potential price growth for the market leader. The on-chain analytics firm noted an increase in short-term Bitcoin supply following the introduction of spot exchange-traded funds (ETFs) in early 2024. While this spike was followed by a cooling period, CryptoQuant suggested that a subsequent rise in short-term supply could materialize if historical trends continue.