Key Points
- Bitcoin’s fall below the Short Term Holder Realized Price indicates a potential drop to $61,000 or lower.
- Despite a recent 7.82% drop, Bitcoin’s Market Value to Realized Value indicates it is still in a bull market.
Bitcoin [BTC] has recently dropped below the Short Term Holder (STH) Realized Price. This suggests that the price may fall to $61,000 or below $60,000 in the near future.
At the time of writing, Bitcoin’s STH Realized Price was $64,372, while BTC’s value was $64,066. The STH Realized Price is the average value of the STH Bitcoin supply, and it is valued at the day each coin was last transacted on-chain.
Historical Data and Market Trends
When Bitcoin’s value surpasses the Realized Price, it often leads to a price increase. However, if it falls below this metric, it can trigger a price correction. For instance, in 2018, Bitcoin fell below the Realized Price of $11,012 and subsequently dropped to $8,455 a few months later.
The Market Value to Realized Value (MVRV) Long/Short Difference is a metric that uses the ratio of long-term holders and new money entering Bitcoin to predict potential market deviations. At the moment, this metric is down to 21.16%, indicating that new money is not entering the coin’s market at a high rate. This could potentially lead to a short-term price drop.
Still a Bull Market
Despite the potential for a short-term price drop, the MVRV Long/Short difference indicates that Bitcoin is still in a bull market. This is because the reading is positive. Therefore, even if the price drops to $61,000, the value could rise later in the cycle.
The Relative Strength Index (RSI) on the 4-hour chart is currently 40.87. The RSI measures momentum, indicating whether it is bullish or bearish. A reading below 50 suggests bearish momentum, which could validate BTC’s bearish prediction.
One analyst, Crypto Caesar, suggests that the decline could be an opportunity to buy before another rally begins. He said, “Bitcoin’s short-term holder realized price generally acts as support in upward trending markets (see chart). Currently sitting at $63,900. Historically this has been a good BTFD opportunity before more banana mode.”
