Having touched the $100,000 threshold briefly on February 7th, Bitcoin [BTC] has been facing challenges in maintaining that level, currently priced at $95,811.80, showing a decrease of 2.65% in the last 24 hours.
Nevertheless, with short-term holders facing minimal profit margins, they have less incentive to sell, potentially creating upward pressure on BTC’s value.
Market Adjustment Indicates Potential Upside
The current data from Glassnode’s Bitcoin Short-Term Holders Profit/Loss Ratio indicates a market reset, with the ratio standing at 1.08.
Short-term holders refer to addresses that sold BTC within 155 days of acquisition. A ratio of 1.08 implies that such holders are marginally profitable, just slightly above the breakeven point of 1.
For every $1.08 of BTC sold at a profit, $1 is sold at a loss.
This ratio has dipped below its 90-day average, signaling a shift towards a more neutral market stance as realized profits decrease.
In the current phase where BTC is trading near $95,000 and the market is resetting, a significant breakout from this level could be on the horizon, as highlighted by CryptoCrypto.
Diminishing Profits Could Spark Supply Constraints
The Market Value to Realized Value (MVRV) ratio for short-term BTC holders has dropped below its 90-day average, aligning with broader market trends.
As of now, the STH-MVRV stands at 1.05, showing that BTC’s current price is slightly above the average purchase price of short-term holders.
This decrease typically eases the selling pressure from short-term holders who anticipate higher prices before selling off their holdings.
The data from Glassnode on realized profit-taking reinforces this shift, displaying a decline in BTC distribution among immediate holders due to reducing profitability from sales.
As fewer immediate holders cash out their profits, the available BTC supply contracts, potentially leading to price surges by reducing sell-offs.
CryptoCrypto also highlighted other market aspects supporting a potential uptrend.
Increased Purchasing Power Evident Through Stablecoin Inflows
Stablecoin supply has shown a significant rise, indicating growing capital inflows into the cryptocurrency market. In the current year alone, the total stablecoin supply has grown by approximately $16.97 billion.
This surge, from $194.2 billion to $211.2 billion, with notable inflows occurring in February, hints at escalated liquidity, a sign often preceding heightened crypto purchases.
Given Bitcoin’s expanding adoption, both as a reserve asset for governments and among institutional investors, it stands to gain from this increasing trend of stablecoin inflows.