Bitcoin [BTC] stands at a critical juncture leading up to Donald Trump’s induction as President on January 20th. Additionally, a vital metric for valuation, STH (short-term holders) MVRV, is also at a crucial point.
Could there be another ‘Trump pump’?
At the moment, the actual price of the STH is estimated at $86k. Taking into consideration the STH MVRV level, this might act as a bullish signal for BTC, as per analysis by CryptoQuant expert Axel Adler. Adler remarked,
“Presently, the STH Realized Price is $86.8K. Should the demand persist until Trump’s swearing-in ceremony, the STH RP could climb to $90K. If the President fulfills at least some of the pledges made to voters early in his term, this could be a powerful bullish trigger.”
The provided chart displayed that the STH MVRV rebounded from the average level in January 2024. Subsequently, BTC experienced an 88% surge to $72k. This development coincided with the green light given to the U.S Spot BTC ETFs, suggesting that a similar scenario might unfold if Trump makes positive announcements for the industry.
Conversely, a drop below the average level for STH MVRV has historically indicated an extended bearish trend or price stabilization for BTC. This scenario may materialize if the price of BTC falls below the STH purchasing price, which was $88k at the time of report, according to Glassnode.
The analysis company stated,
“The $BTC price is currently about 7% above the STH purchasing price of $88,135. A stabilization below this level could indicate weakening sentiment among new investors – a potential turning point in market directions.”
In essence, if BTC holds above $88k before or after Trump’s induction, a substantial recovery might be on the horizon. Nevertheless, a drop below $88k could prompt a panic sell-off among the STH group, causing further decline in the cryptocurrency’s value.
In the Options market, traders have been pricing in negative to moderately bullish scenarios pre and post the induction. This was highlighted by the 24-hour shift in the 25RR (25-Delta Risk Reversal).
The indicator showed negativity for Option expiries on January 17th and 24th, indicating an increase in hedging actions or a preference for put options (bearish positions to guard against downward risks).
For the expiry on January 31st, the 25RR was marginally positive at 0.31, signaling a slight preference for call options (bullish positions). In simple terms, Options traders anticipate significant fluctuations and possible declines leading up to the event, followed by some level of stability afterward.