After a modest rise in price over the last week, Bitcoin (BTC) has climbed past the $98,000 mark, with market enthusiasts pushing for a return to the $100,000 territory. Notably, a report by CryptoQuant analyst Darkfost highlights an uptick in demand from short-term investors, coinciding with this recent price rally.
Darkfost’s latest analysis reveals that long-term Bitcoin holders have been actively selling, but their actions are being offset by a surge in interest from short-term holders. He points out that such asset transfers usually happen following a local market peak or at the height of a bull cycle. This could signal potential concerns for Bitcoin as it recovers from December’s price adjustment.
Delving into the behavior of short-term holders, who are currently fuelling market demand, Darkfost identifies $85,000 as a pivotal price point. This figure represents the average buying price for Bitcoin held by short-term investors, often acting as a significant psychological level, providing support or resistance. As Bitcoin continues its upward trend, maintaining $85,000 as a support level is crucial for sustaining the bull market momentum. Looking at longer acquisition periods for short-term holders, ranging from one week to six months, additional key support levels are found at $81,000 and $60,000.
Nonetheless, as Bitcoin makes its recovery, it faces significant resistance at $99,000. This mark is tied to the realized price for short-term holders who entered the market one week to a month ago. As Bitcoin nears this price, these relatively new players might opt to sell in order to recoup their initial investments, potentially stalling further growth.
In another observation, Darkfost mentions that the spent output profit ratio (SOPR) for short-term holders stands neutral at a value of 1, following Bitcoin’s dip from $108,000 in December. This indicates that short-term holders are not currently selling at a profit, likely easing some selling pressure. Coupled with the ongoing sell-off from long-term holders being met with rising demand from short-term investors, market liquidity could tighten, which might hinder a full bullish market recovery.
As a result, Darkfost suggests that Bitcoin may remain in a consolidation phase, with the possibility of further price corrections. Currently, Bitcoin is trading at $98,030, having gained 1.27% in the last 24 hours. However, the trading volume has decreased by 15.47%, now valued at $36.26 billion.
