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An analyst has pointed out how Bitcoin recently closed below a historically important on-chain level, a failure to reclaim which could spell trouble for BTC.
Bitcoin Fell Below Short-Term Holder Cost Basis In Latest Crash
In a new post on X, Maartunn discussed BTC’s recent close below the realized price of the short-term holders and stressed its importance in reclamation.
The “realized price” here refers to an on-chain indicator that tracks the price at which the average investor on the Bitcoin network acquired their coins. In other words, it measures the average cost basis in the BTC market.
When the spot value of a cryptocurrency is below this metric, it means that the average investor in the market is carrying their coins at a loss right now. On the other hand, being above the indicator suggests that the holders as a whole are in the green currently.
In the current topic, the realized price of the entire Bitcoin market isn’t of interest but rather of only a subsection: the short-term holders (STH).
The STHs are the BTC investors who bought their coins within the past 155 days. These holders represent the inconsistent side of the market, who easily show a reaction whenever a change like a crash or rally occurs in the sector.
Now, here is a chart that shows the trend in the realized price specifically for these investors over the past year:
The price of the asset appears to have seen a cross under this metric in recent days | Source: @JA_Maartun on X
The realized price of the Bitcoin STHs is floating around $58,500. During the latest crash, Bitcoin went as low as below $57,000, meaning that the plunge has put these investors under pressure.
Historically, the average cost basis of the STHs has been significant for the cryptocurrency, as it has taken turns acting as support and resistance, depending on the market’s phase.
During bullish trends, this metric often acts as a point of support. The chart shows that when Bitcoin had declined near this level earlier in the year, it had found a rebound.
The metric acts as resistance during bear markets, keeping the price below it. These patterns may be related to how investor psychology works.
In bullish periods, the STHs might view their cost basis as a profitable buying opportunity, so they accumulate during dips in it, thus helping the price turn around. In bear markets, these investors could look at the level as a point of exit, as they may not believe the price will go up any further.
After closing below the STH realized price earlier, Bitcoin is now fighting to reclaim this historical level. It now remains to be seen if support will once again be found or if the level will truly become lost.
BTC Price
Bitcoin has climbed back above the STH realized price, trading above $59,300. This is certainly a sign in the positive direction, but it’s hard to say whether this recovery will last.
Looks like the price of the coin hasn't yet recovered much since the crash | Source: BTCUSD on TradingView
