Key Points
- Bitcoin’s short-term holder activity suggests a possible local top formation nearly three weeks ago.
- Long-term holder metrics from Santiment indicate potential warning signs.
Bitcoin’s short-term holder (STH) realized cap metric has seen a significant increase, suggesting a possible local top formation nearly three weeks ago.
Realized capitalization, a variant of market capitalization, is calculated based on the price at which the coin was last moved, not the current market price.
Bitcoin Short-Term Holders Taking Profits
Analyst Amr Taha noted in a CryptoQuant Insights post that the STH realized market cap change experienced a dramatic spike above $10 billion.
Increases in STH realized cap of over $6 billion usually coincide with holders realizing a small profit and buyers entering during market tops.
This does not promise an immediate dip, but since March 2023, STH realized cap spikes above $6 billion have been followed by a correction over the next few weeks.
Warning Signs of Network Stagnancy
The mean dollar invested age (MDIA), which calculates the average age of the tokens on the network weighted by their purchase price, has been trending upward since mid-March.
An uptrend in MDIA is usually a bullish sign. However, if it continues to rise for an extended period, it could indicate network stagnancy due to a decrease in transactions.
The MVRV ratio showed holders were at a healthy profit, but fears of imminent profit-taking due to this metric need not be high.
The liquidation heatmap showed a relative sparsity of liquidation levels below current market prices. Conversely, the $73k-$75k region was full of short liquidations.
The trend of Bitcoin (BTC) remains unclear nearly two months after the halving. Historically, the Q3 performance of BTC has been relatively weak. Investors need to be prepared for a long, drawn-out battle.
