Bitcoin Recovery: BTC Back Above Average Cost Basis For Short-Term Holders

by

As a seasoned researcher with a strong background in cryptocurrencies and market analysis, I have closely monitored Bitcoin’s price movements and trends for years. The recent development where Bitcoin has surged past the short-term holders’ cost basis once again is an intriguing one, and it holds significant implications for investors.

As a crypto investor, I’ve been trying to make a bullish move in my Bitcoin investment for several days, but the broader market decline made it challenging. However, Bitcoin, the largest cryptocurrency asset, has managed to reclaim the average cost basis for short-term holders in a slight recovery during the week. This rise above the cost basis is often seen as a bullish sign by market observers and investors alike.

Bitcoin Surges Past Short-Term Holders Cost Basis

Maaten, an accomplished market analyst and community liaison at CryptoQuant, highlighted some intriguing findings in his latest research. These developments indicate that investors who have held crypto assets for less than 155 days may once again experience profits. This situation signifies renewed confidence among this investor group.

Based on the insights shared by the market expert, the current price of Bitcoin has bounced back up to the level of the Short-Term Holders’ (STH) average purchase price. This is a positive sign since, when Bitcoin returns to its usual cost basis, STHs often add to their holdings, thus creating a support floor.

Bitcoins past performance is noteworthy: since 2023, it has bounced back twice from the short-term holders’ purchase price, resulting in approximately 30% profits each time. Given that this trend has resurfaced, there’s a strong possibility for Bitcoin to experience yet another gain of at least 30%, potentially more, during this bull market.

The research read:

In the past few days, Bitcoin’s value has surpassed its Short-Term Holders’ Realized Price. This is an optimistic indication as short-term investors typically buy more when the cryptocurrency reaches their initial investment cost. Historically, after such occurrences since 2023, Bitcoin has yielded profits of over 30%.

In simpler terms, the primary investment, which is Bitcoin in this context, has surpassed its purchase price for investors with short-term horizons. This development occurred amidst a significant drop in bullish sentiment towards Bitcoin as reported by Santiment on Thursday. According to their analysis, despite this week’s minor uptick in the crypto market, the optimistic chatter about Bitcoin has noticeably dwindled.

The data from the trading platform indicates that a significant number of traders are entering short positions, particularly on Binance, the leading cryptocurrency exchange. This action suggests that these traders expect Bitcoin’s price to drop further. However, it’s important to note that other factors in play could potentially lead to an increase in the value of Bitcoin in the coming days.

$100,000 Per BTC Possibility Increases

Despite a decrease in optimism regarding Bitcoin, the probability of the digital currency surpassing the $100,000 mark has increased significantly. As per Kalshi, a US-based legal exchange, Bitcoin now holds a 22% chance of reaching this milestone. Moreover, there’s an 8% likelihood that it may even reach the $150,000 price point, and a 57% probability of touching the $80,000 mark.

Kalchi relies on traders placing bets on BTC‘s future price for its predictions. The exchange also posits that the prediction could materialize as BTC prices increase, coinciding with the odds of Donald Trump winning the GOP Presidential election in November this year.

Bitcoin Recovery: BTC Back Above Average Cost Basis For Short-Term Holders

Read More

2024-07-19 19:13