Fresh insights from blockchain analysis indicate that might not be resolved yet, posing a challenge mainly for those who have invested in the short term. After slipping in value last week, Bitcoin struggles to bounce back, leaving investors in suspense about potential further drops. Significantly, Bitcoin’s trading value is now lower than the average acquisition cost for short-term investors.
A Rough Patch for Bitcoin Short-Term Investors
Typically, short-term investors purchase Bitcoin with the aim of selling after a few weeks, often to capture quick profits. Not long ago, at the start of this month, Bitcoin surged past the $71,000 mark, prompting many short-term buyers to join the fray, anticipating further gains.
Nevertheless, the tide turned swiftly, with Bitcoin’s price plummeting to a 30-day minimum of $63,622 in the last day, as stated by CoinMarketCap. It’s also important to note that miners have started to sell off their Bitcoin reserves recently, exacerbating the downward trend in price.
Based on on-chain analytics broadcasted by crypto analyst Ali Martinez on platform X, it’s clear that short-term holders are the ones feeling the squeeze. This pressure is due to the fact that the current market price of Bitcoin is below their average purchase price, or “realized price,” of $66,200—leaving them with paper losses.
Pressures are mounting for short-term #Bitcoin investors as the market value remains below their realized purchase price of $66,200!
pic.twitter.com/q2tTyrApnf— Ali (@ali_charts)
June 22, 2024
Implications for Bitcoin’s Market Price
Short-term owners now stand at a crossroads: they must decide whether to absorb the losses and dispose of their Bitcoin or to Although predicting the individual moves of investors is challenging, the nature of short-term holders usually leads to sales, which might further suppress prices in the near term. On the flip side, long-term investors might see this downturn as just a hiccup and hold onto their investments.
At this point, Bitcoin sits at $64,381 and is in desperate need of a strong rally to prevent further depreciation. Blockchain analytics firm CryptoQuant outlined in their that Bitcoin risks sinking to the $60,000 range.
Furthermore, it is evident from that miners have offloaded a substantial volume of 30,000 BTC valued at $2 billion, marking the most rapid sell-off in over a year since early June.
Image Source: Arsenii Palivoda / Shutterstock
