This metric, which represents the average cost basis of investors holding BTC for less than 155 days, has consistently acted as a floor for price downturns since April.
According to Glassnode’s latest analysis, Bitcoin corrections have repeatedly found robust support at this crucial level. The Short-Term Holder Realized Price essentially indicates the aggregate price at which short-term investors acquired their Bitcoin, making it a significant psychological and technical support zone.
However, the current state of the market, as indicated by the Short-Term Holder MVRV (Market Value to Realized Value) ratio, suggests increasing pressure on these newer market participants. The STH-MVRV is now declining and sits at a low of just 0.03. This figure implies that, on average, short-term holders are only experiencing approximately 3% in unrealized gains.
A STH-MVRV value close to 1 indicates that short-term holders are at their cost basis (breakeven), while values below 1 suggest they are, on average, at a loss.
A value of 0.03, while still above 0, signals that a significant portion of recent buyers are either at or very near their entry price, making them more susceptible to selling pressure should prices decline further.
Glassnode’s data underscores that while this level has proven to be a reliable support, the diminishing unrealized gains for short-term holders could test the market’s resilience. Investors will be closely watching whether this historical support level continues to hold firm amidst the mounting pressure on newer entrants in the Bitcoin market.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/market/understanding-bitcoins-critical-support-what-it-means-for-your-holdings/