Janice R. Andrews
On-chain data suggests that the $65,000 level may present a major obstacle for Bitcoin’s latest recovery attempt. The top cryptocurrency was up 1% at $63,200, attempting to stabilize following a 7% decline in June that erased gains from May. Miner selling and worries that inflows into ETFs are more likely to be non-directional arbitrage than pure bullish wagers were the main causes of this collapse.
Short-term holders—those who have had Bitcoin for 155 days or less—are now in a risky situation due to June’s decline. According to LookIntoBitcoin, these holders have an overall cost basis of $65,000. Realized pricing, which is the average price at which coins were last spent on-chain, is used by on-chain analytics companies to calculate this cost base. As things stand, short-term holders are losing money and might close their holdings close to breakeven, which might lead to more selling pressure at $65,000.
For the first time since August 2023, the price of Bitcoin has dropped below the total cost basis of short-term holders. According to researchers at Blockware Intelligence, “short-term market speculators may attempt to sell their bets at a ‘breakeven’ level,” thus we could expect some resistance shortly around the ~$65,000 level.” They added that once Bitcoin lost its realized price support level for short-term holders last summer, the price moved sideways for an additional two months before rising once more.
Long-term holders, on the other hand, are in a more comfortable position; their average cost base is less than $20,000. These investors will probably hang onto their investments or even buy more Bitcoin, which will stabilize the market. Because of their reduced cost basis, they are more focused on the long-term potential of Bitcoin and less affected by short-term price volatility.
It will be important to keep an eye on the $65,000 level as Bitcoin attempts to rebound from its recent losses. The sale of short-term holdings by holders could provide a serious obstacle to the recovery of Bitcoin’s price. Long-term holders’ perseverance, nevertheless, can offer the reassurance required to overcome this opposition and open the door for further profits.
The selling pressure from short-term holders puts Bitcoin’s possible recovery at $65,000, while long-term investors’ confidence supports the market’s favorable long-term view.
