The analyst explained how the key indicator of Bitcoin is returning to levels that could be considered the life of a bull-market uptrend.
A Short-Term Bitcoin Owner Has Seen The Price Isn’t Growing So Fast Anymore
In a new post on X, analyst James Van Straten talked about the 7-day rate of change in the Guaranteed Price for short-term holders of Bitcoin. “Performed Price” here refers to an on-chain metric that tracks the cost base of an average investor or address on the network.
If the value of the index is greater than the spot price of the cryptocurrency, then the owners as a whole can be considered to be in a position of net profit. On the other hand, being below the mark means that the market as a whole has taken a loss.
In the context of the current article, the Price Made for only one specific market segment is of interest: short-term holders (STHs). This collection includes investors who bought their coins in the last 155 days.
STHs form one of the two main categories of the BTC sector on the basis of holding time, while the other group is known as long-term holders (LTHs).
Statistically, the longer an investor holds on to their money, the less likely they are to sell at any time, so STHs are considered to represent the weak hands of the market, while LTHs represent strong HODLers.
Now, here’s a chart shared by an analyst showing the trend in STH’s Made Price, and its 7-day rate of change, over the past few years:
The 7-day rate of change in the metric appears to have gone down in recent days | Source: @btcjvs on X
As seen in the graph above, the Bitcoin STH Realized Price has increased over the past few months as a rally in the coin’s price has occurred. The reason for this trend is the fact that STHs represent late buyers, who have to buy at higher prices during bull runs.
The cryptocurrency has been trading above the group’s cost base for a long time, which means its members have been enjoying profits. Historically, the line has acted as a sort of boundary between macro bearish and bullish trends, so BTC continuing to trade higher is a good sign.
As Van Straten pointed out, another potential bullish sign is the fact that the 7-day change in the index has seen some cooling recently. In the past, the STH Price was increasing at a significant rate, something that often leads to the coin’s peaks.
As the index is now growing at a more healthy rate, it is possible that Bitcoin could continue its run in a sustainable manner.
BTC price
At the time of writing, Bitcoin is hovering around $98,400, down more than 6% in the past week.
Looks like the price of the coin has shot up over the past day | Source: BTCUSDT on TradingView
Featured image from Dall-E, Glassnode.com, chart from TradingView.com
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