An analyst explains how Bitcoin faces the wave of sales pressures that these price levels revolve around short-term holders.
Bitcoin Short-term Holder MVRV can mark these levels as important
In a new post on X, Cryptoquant writer Axel Adler JR talks about the trend of market value and realised value (MVRV) for short-term Bitcoin holders.
The MVRV ratio is an indicator that tracks the ratio between Bitcoin’s market cap and implementation cap. The former represents the value currently held by investors, while the latter was initially invested by them. Therefore, this ratio tells us the profit loss status of the network.
When the value of the indicator is greater than 1, this means that the average investor on the chain will hold unrealized profits. On the other hand, it is below the threshold that means the dominance of the holder’s loss.
In the context of the current topic, only the MVRV ratios for a specific section are of interest: Short-term holders (STHS). STH refers to Bitcoin investors who have purchased coins in the past 155 days.
Members of this cohort tend not to be too determined, so they often react to the market. In particular, as long as they hold too high profits, they want to realize their gains, which may become possible.
Now, here is a chart shared by analysts showing the trends in Bitcoin’s STH MVRV ratios over the past few years:
As can be seen in the above chart, the Bitcoin STH MVRV ratio is below the 1 mark earlier this year, as the price of assets falls below the group’s average cost base.
With the latest recovery rally, cryptocurrency has managed to break online, bringing STH back on its earnings. So far, the MVRV ratio has only reached the 1.09 mark, which is not too high compared to past gatherings. Therefore, STH may not have tried to achieve profits.
In the chart, Adler JR stresses that two levels of profitability are high enough that the cohort is indeed likely to cause huge sales pressure: 1.25 and 1.35 STH MVRV ratios. Currently, the former costs $118,000 and the latter costs $128,000.
Now, it remains to be seen whether Bitcoin is high enough to retest these levels, and if anything, whether the STH sell-off will become a resistance.
BTC price
At the time of writing, Bitcoin’s transactions were around $103,200, up more than 2% over the past seven days.
