Bitcoin holders have been active in the short term, and their profitability may highlight current levels of support and resistance, Glassnode reveals.
According to the data, a break below $20,000 is needed to reset the key indicator, which includes taking speculative profits.
In the latest edition of its weekly newsletter, The Week On-Chain, analytics firm Glassnode reveals that short-term holders (STH) can dictate BTC price resistance.
Profit taking reinforces the resistance level
As BTC/USD moves towards $25,000, we basically start to see a STH (155 day coin hold).
This is captured in the Market Value Realized Value (MVRV) metric, which compares Bitcoin’s market capitalization to the value of the coins that move on-chain.
“By comparing these two indicators, MVRV can be used to understand whether prices are above or below ‘fair value’ and to assess the profitability of the market,” he said. This is explained in the attached guide.
MVRV is hitting a multi-month high above 1.2, which coincides with $23,800 as its resistance area for BTC price.
As Glassnode writes, “STH’s profit potential tends to increase during periods when the average STH is 20% or more, and above 1.2 it returns STH-MVRV.”
“The recent rejection at the $23.8,000 level resonates with this structure as STH-MVRV reached 1.2 before the stop,” it continued this week.
“If the market returns him 19.3 thousand USD, STH-MVRV returns to 1.0, indicating that the spot price has returned to the cost base of this new group of buyers.
So $19,300 is an attractive target for profitability and incentives for him not to sell STH.
As reported by Cointelegraph, its Glassnode is not alone in offering $20,000 as its BTC/USD support, with a new local low forming below that line. it can appear.
Bitcoin In ‘Transition’
Meanwhile, Glassnode’s scope also includes the long-term holder (LTH) cost base and the activity of whales investing in Bitcoin since the end of the last bear market in 2018.
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The realized bid price for the so-called “old” – the price that last fluctuated in the aggregate – is now $23,500, further solidifying the region as a key battleground.
On the downside, Bitcoin’s overall price is at $19,800, again weighing on the idea that this zone could eventually form support.
“The Bitcoin economy often reacts not only to levels widely observed in traditional technical analysis, but also to the initial levels of psychological costs for various groups of investors printed on the chain. is not only about the realized price, but also about the scale of the supply’s profit and loss,” Glassnode concluded.
“From this lens, the market is currently in transition, limited by realized old supply and average whales operating since 2018.” cycle bottoms, prices.
BTC/USD is at $22,400 at the time of writing on March 7th, according to Cointelegraph Markets Pro and TradingView.