Crucial Bitcoin Metric Back To Healthy Bull Levels: Analyst

An analyst has explained how an important Bitcoin indicator is back to levels that may be considered healthy for a bull-market uptrend.

Bitcoin Short-Term Holder Realized Price No Longer Growing Too Fast

In a new post on X, analyst James Van Straten has talked about the 7-day rate of change in the Realized Price of the Bitcoin short-term holders. The “Realized Price” here refers to an on-chain metric that keeps track of the cost basis of the average investor or address on the network.

When the indicator’s value is greater than the spot price of the cryptocurrency, it means the holders as a whole can be assumed to be in a state of net profit. On the other hand, it being under the mark implies the overall market is holding loss.

In the context of the current topic, the Realized Price of only a particular market segment is of interest: the short-term holders (STHs). This cohort includes the investors who bought their coins within the past 155 days.

The STHs make up one of the two main divisions of the BTC sector on the basis of holding time, with the other group being known as the long-term holders (LTHs).

Statistically, the longer an investor holds onto their coins, the less likely they become to sell at any point, so the STHs are considered to include the weak hands of the market, while the LTHs represent the resolute HODLers.

Now, here is the chart shared by the analyst that shows the trend in the Realized Price of the STHs, as well as its 7-day rate of change, over the last few years:

The 7-day rate of change in the metric appears to have gone down in recent days | Source: @btcjvs on X

As is visible in the above graph, the Bitcoin STH Realized Price has gone up during the last few months as the rally in the coin’s price has occurred. The reason behind this trend is naturally the fact that the STHs represent the recent buyers, who have to purchase at increasingly higher prices during a bull run.

The cryptocurrency has been trading above the cost basis of this cohort for a while now, implying that its members have been enjoying profits. Historically, the line has served as a sort of boundary between macro bearish and bullish trends, so BTC continuing to trade above it is a positive sign.

As Van Straten has pointed out, another potential bullish sign is the fact that the 7-day rate of change in the indicator has seen a cooldown recently. Earlier, the Realized Price of the STHs was expanding at a notable rate, something that has generally led to tops for the coin.

With the indicator now growing at a more healthy rate, it’s possible that Bitcoin could continue its bull run in a sustainable manner.

BTC Price

At the time of writing, Bitcoin is floating around $98,400, down more than 6% over the last week.

Looks like the price of the coin has shot up over the past day | Source: BTCUSDT on TradingView

Featured image from Dall-E, Glassnode.com, chart from TradingView.com