An analyst recently shed light on a significant Bitcoin indicator that’s returning to levels indicative of a healthy upward trend during a bull market.
In a discussion on platform X, analyst James Van Straten delved into the seven-day rate of change for the Realized Price of Bitcoin’s short-term holders. The “Realized Price” essentially measures the average purchase cost per Bitcoin for investors on the blockchain network.
When the Realized Price exceeds the current market price, it suggests that collectively, holders are in profit. Conversely, if it falls below, the market is generally experiencing losses.
The focus here is on the Realized Price concerning a specific segment known as short-term holders (STHs), those who have bought Bitcoin within the last 155 days.
Bitcoin investors are typically split into two categories: short-term holders and long-term holders (LTHs). Statistically speaking, the longer someone holds Bitcoin, the less inclined they are to sell, making STHs often considered the more tentative investors, while LTHs are viewed as committed HODLers.
Below is a chart shared by the analyst, depicting the changes in the STHs’ Realized Price as well as its seven-day rate of change over several years:
As you can see from the graph, the Realized Price for STHs has been on the rise in recent months, following Bitcoin’s price surge. This trend is expected since STHs represent recent buyers acquiring Bitcoin at increasingly higher prices during a bull market.
Currently, the cryptocurrency’s market price is above the purchase price of these holders, indicating they’re making profits. Historically, this price level has marked the divide between extended bearish and bullish markets, suggesting a positive outlook for BTC.
Van Straten highlighted another potentially bullish signal: a recent slowdown in the seven-day rate of change for this metric. Previously, a rapid increase in the STHs’ Realized Price has often preceded market peaks.
With the indicator now stabilizing at a more sustainable growth rate, there’s a possibility for Bitcoin’s bull market to continue progressing in a healthier manner.
As for Bitcoin’s current position, it’s trading around $98,400, having dipped more than 6% in the past week.
The coin seems to have rebounded in the past day, as per the data from TradingView. The visual is supported by sources including Dall-E and Glassnode.com.
