The Bitcoin (BTC) market is currently experiencing a significant shift in dynamics, with significant activity between long-term holders (LTHs) and short-term holders (STHs).
According to a recent analysis from CryptoQuant, historically, such changes often reflect local market peaks or even cyclical peaks, depending on the general market environment and broader economic conditions.
Currently, demand from short-term holders continues to play an important role in supporting Bitcoin’s price stability amid ongoing market volatility.
Long Term Holders Vs. Short Term Buyers
An analysis by CryptoQuant analyst Darkfost revealed that short-term holders, especially those who acquired Bitcoin in recent months, actively influence market sentiment.
By analyzing the price data obtained for various short-term acquisition periods, different support and resistance levels emerge.
These price ranges include $41,000 for the average amount received, $85,000 for short-term owners overall, $99,000 for owners within one week to one month, $81,000 for one to three months, and $60,000 for three to six months.
These statistics show important psychological and technical price points where market participants can make important buying or selling decisions, according to Darkfost.
The analyst revealed that the Short-term Holder Spent Profit Ratio (STH SOPR) currently remains neutral at 1 after a decline in Bitcoin’s last rally, which pushed its price to $108,000. The STH SOPR serves as the primary metric for evaluating the profit-taking behavior of short-term holders.
A neutral SOPR indicates that recent selling activity from short-term holders has not been very profitable, reducing the incentive to sell the spread at current price levels.
However, this neutral situation raises potential headwinds for a quick recovery. A decline in the STH SOPR points to a decrease in available profits, which could reduce upside momentum in the short term.
Despite these challenges, demand from short-term owners has been able to absorb significant selling pressure from long-term owners, preventing sharp price declines. Darkfost wrote:
In conclusion, selling pressure from LTHs has so far been well absorbed by buying pressure from STHs. However, we note that the STH SOPR is decreasing, which may prevent a quick recovery. In the short term, a period of consolidation or even a deep correction may occur.
Bitcoin Market Performance and Outlook
Meanwhile, Bitcoin is currently trading at a price of $97,357 after recording a small increase of 1.1% in the previous day.
While this surge has helped BTC regain momentum in recent weeks, it still isn’t enough to propel the cryptocurrency back to six-digit numbers or its high above $108,000.
The featured image was created with DALL-E, a Chart from TradingView