Bitcoin is fighting an uphill battle after missing a key bullish trend line in June for the first time in nearly a year.
According to data from on-chain analytics platform CryptoQuant, Bitcoin (BTC) price action is retesting the price realized by short-term holders (STH).
BTC price turns short-term holders into profit
Bitcoin STH activity is a key reference point during bull markets, as the aggregate cost basis of this group of speculative holders often forms long-term price support.
The same phenomenon has been observed since the recent bull market that started in early 2023, with BTC/USD only briefly falling below the STH realized price.
Now another downtrend is coming to an end. STH entities, defined as holding a certain amount of BTC for 155 days or less, are no longer incurring losses.
“The Bitcoin price has recently recovered the STH realized price,” CryptoQuant contributor JA Maartunn wrote in one of his Quicktake blog posts on July 18.
“This is a positive sign, as short-term holders often add to positions when Bitcoin returns to a mean-cost basis, creating support levels.”
Maartunn also noted that “since 2023, Bitcoin has recovered its short-term realized price twice, each time with a gain of at least 30%.”
The exact level of the STH realized price varies depending on the source, with CryptoQuant’s estimate being slightly lower than other sources.
“Over the past 30 days, the short-term holder (STH) group has seen a dramatic decline in profitability, with over -66% of supply converted to unrealized losses,” on-chain analytics firm Glassnode wrote in the latest edition of its weekly newsletter. The Week OnchainPublished on July 16th.
“This is one of the largest declines in STH profitability on record, suggesting that a significant number of ‘top buyers’ have had their portfolio profitability challenged in recent weeks.”
Glassnode has set the STH realized price at $64,300 at the time of writing.
Bitcoin traders warn of falling trading volumes
Nonetheless, the area near $65,000 remains the main target for bulls to turn to next.
Related: BTC Price at All-Time High in July? 5 Things to Know About Bitcoin This Week
Among those who see a high probability of a sustained uptrend is renowned trader and former fund manager Axel Kibar.
“This is the 5th month that $BTCUSD has not backed down from the strong resistance around 65K,” he told X’s followers.
“I see this as very bullish long term. Holding the resistance line and not intending to sell is usually a sin when a breakout is imminent.”
Popular crypto trader JT has argued that BTC/USD needs to break multiple Fibonacci correction levels that are currently suppressed in order to reach new highs.
JT added that while looking closely, trading volume has increased “significantly” compared to the recent BTC price low of $53,000, which was the lowest in four months.
“Volume on this pump was extreme at the lows of $53,000. It has now come down dramatically. We are now in a below-average volume profile,” he wrote in part of his commentary.
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.