The Bitcoin (BTC) market is currently experiencing significant shifts in supply dynamics, with notable activity between long-term holders (LTHs) and short-term holders (STHs).
According to the latest analysis from CryptoQuant, historically, such transitions have often indicated local market tops or even cycle peaks, depending on the overall market environment and broader economic conditions.
Presently, demand from short-term holders continues to play a critical role in supporting Bitcoin’s price stability amid ongoing market volatility.
Long-Term Holders Vs. Short-Term Buyers
The analysis made by the CryptoQuant analyst Darkfost revealed that the short-term holders, particularly those who acquired Bitcoin in recent months, are actively influencing market sentiment.
By analyzing the realized price data of various short-term acquisition periods, distinct support and resistance levels become apparent.
These realized price levels include $41,000 for the general average realized price, $85,000 for short-term holders overall, $99,000 for holders within one week to one month, $81,000 for one to three months, and $60,000 for three to six months.
These figures reflect key psychological and technical price points where market participants may make significant buy or sell decisions, according to Darkfost.
The analyst revealed that the Short-Term Holder Spent Output Profit Ratio (STH SOPR) currently remains neutral at 1 after declining from Bitcoin’s last rally, which pushed its price to an all-time high of $108,000. The STH SOPR serves as a key metric to evaluate short-term holders’ profit-taking behavior.
A neutral SOPR indicates that recent selling activity from short-term holders has not been significantly profitable, reducing the incentive for widespread sell-offs at current price levels.
However, this neutral stance suggests potential headwinds for an immediate bullish recovery. The decline in STH SOPR points to diminishing realized profits, which could slow down upward momentum in the short term.
Despite these challenges, short-term holders’ demand has managed to absorb much of the selling pressure from long-term holders, preventing sharp price declines. Darkfost wrote:
In conclusion, the selling pressure from LTHs has so far been fairly well absorbed by the buying pressure from STHs. However, we note that the STH SOPR is declining, which could hinder an immediate bullish recovery. In the short term, a period of consolidation or even a deeper correction might occur.
Bitcoin Market Performance And Outlook
Meanwhile, Bitcoin is currently trading at a price of $97,357 after recording a slight increase of 1.1% in the past day.
While this uptick has helped BTC regain positive momentum in recent weeks, it remains insufficient to propel the cryptocurrency back to the six-digit price mark or its all-time high above $108,000.
Featured image created with DALL-E, Chart from TradingView