Bitcoin Eyes Potential Breakout Amidst Key Price Movements
By: Eliza Bennet
Bitcoin (BTC), the leading cryptocurrency, hovers between the price range of $105,000 and $125,000, posing a potential breakout towards $141,000 should it surpass these critical levels. According to Glassnode, a pivotal report highlights the importance of the Short-Term Holder (STH) cost basis, which currently aligns near $105,400, serving as a pivot point between bullish and bearish scenarios. The price of Bitcoin has approached resistance multiple times at the STH +1 band of approximately $125,100, an area marked by significant market activity and potential resistance. If Bitcoin manages a decisive close beyond this level, attention could shift to the STH +2 band at approximately $141,600, where historically, intensified sell-side pressure has been observed.
The recent weekend stress test demonstrated the resilient liquidity within the Bitcoin network. An early investor transferred around $9.6 billion worth of Bitcoin, causing the spot price to dip to $115,000 before quickly stabilizing at approximately $118,000. This event underscores the network's ability to maintain depth and recover even during low-activity periods like weekends. Notably, the Realized Cap—reflecting the dollar-denominated liquidity embedded within the blockchain—exceeds $1 trillion, supporting Bitcoin's rapid stabilization. Furthermore, the report identifies a surge in flow metrics, with Net Realized Profit/Loss peaking at $3.7 billion, and realized profits surpassing losses by a remarkable 571x multiple, a scenario observed on less than 1.5% of days.
The cryptocurrency market is also witnessing substantial rotations of capital. Long-Term Holders (LTH) saw an all-time high in Net Realized Profit/Loss, achieving $2.5 billion, marking a record single sell-side print amid distribution to strengthen positions. The Long-Term Holder to Short-Term Holder supply ratio has shrunk by 11% over the past month, mirroring distribution trends observed near previous cycle highs. Crucially, more than 97% of Bitcoin supply remains in profit, with total unrealized profits reaching $1.4 trillion. However, the report cautions that extended profit-taking can occasionally precede local market exhaustion, although it doesn't necessarily indicate an immediate top, as historical peaks have shown delayed patterns.
With the current cost-basis distribution highlighting a significant volume node from $117,000 to $122,000 and a gap from $115,000 to $110,000, the market exhibits potential re-testing areas amid weakness. Among Short-Term Holders, support sustains between $110,000 and $117,000, lending further significance to maintaining above $125,000 with conviction. The influence of short-term holders is undeniable, with strategic movements potentially dictating the forthcoming trend directions for Bitcoin.
