Bitcoin Rebounds After Nearing Cost Basis Of Short-Term Whales
April 15 2024 - 11:00AM
NEWSBTC
Bitcoin has found a rebound back above the $66,000 mark following a
drop towards the on-chain cost basis of the short-term holder
whales. Bitcoin Drawdown Had Nearly Put Short-Term Whales Under
Pressure As pointed out by an analyst in a CryptoQuant Quicktake
post, BTC’s price had neared the Realized Price of the short-term
holder whales during the recent drop, but had still managed to
remain above the level. The “Realized Price” here refers to an
on-chain indicator that, in short, keeps track of the cost basis
(that is, the acquisition price) of the average investor in the
Bitcoin market. Related Reading: PEPE Preparing For A 54% Move?
Analyst Thinks So When the spot price of the cryptocurrency is
trading above this level, it means that the investors as a whole
are in a state of unrealized profits right now. On the other hand,
it being under implies the overall market is carrying losses. In
the context of the current discussion, the Realized Price of the
entire Bitcoin market isn’t of interest, but that of only a part of
it: the short-term holder (STH) whales. The STHs refer to the BTC
investors who bought their coins within the past 155 days, while
the whales are categorized as entities holding greater than 1,000
BTC. As such, the STH whales would refer to the large investors who
bought during the last five months. Naturally, the Realized Price
of this group would indicate the average whale buying price over
the past five months (and this price would obviously have to be one
the cryptocurrency had traded at on some occasion inside this
timeframe). Now, here is a chart that shows the trend in the
Bitcoin Realized Price for the STH whales over the last decade: The
value of the metric appears to have shot up in recent months |
Source: CryptoQuant From the graph, it’s visible that the Realized
Price of the STH whales has rapidly climbed alongside the sharp
rally Bitcoin has gone through this year. This makes sense, as the
STHs represent the new hands coming into the market, who would have
to buy at higher prices as the asset’s surge would continue. Not
only that, but the STHs who age past the 155 days mark (that is,
those who bought at the relatively low prices) exit out of the
cohort, thus raising the average even further. The group that these
matured investors advance to is known as the long-term holder (LTH)
cohort. In the same chart, the quant has also attached the data for
the Realized Price of the LTH whales as well. It would appear that
these veteran whales have their cost basis at just $21,500, meaning
that these investors would be getting some big rewards for their
patience. In contrast, the STH whales have their Realized Price at
$60,700. Related Reading: Dogecoin Usurped: These Memecoins
Overtake DOGE In Active Trader Count During Bitcoin’s recent
drawdown, the asset had come close to retesting this mark. Such
retests have historically lead to reactions in the market and
during bull runs, this reaction has often appeared in the form of
buying. This may be why the cryptocurrency found its rebound near
the $60,700 level. BTC Price With its latest rebound, Bitcoin has
so far managed to recover back towards the $66,500 level. Looks
like the price of the coin has made some recovery from its recent
drop | Source: BTCUSD on TradingView Featured image from Thomas
Kelley on Unsplash.com, CryptoQuant.com, chart from TradingView.com
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