Bitcoin (BTC) Surges above $98,000 as Short-Term Holders’ Demand Increases

Following a mild price rebound in the past week, Bitcoin (BTC) has surged above 98,000 with the market bulls aiming for a return to the $100,000 price zone.

Bitcoin (BTC) price opened the new week on a bullish note, surging past the $98,000 level as market bulls eye a return to the $100,000 price zone. BTC price had a bullish performance in the past week, surging by over 8% from a local bottom around $89,000 on Monday.

Bitcoin price action saw a strong bullish momentum in the first half of the week, rallying past key resistance levels like $92,000 and $95,000. However, BTC price faced some selling pressure at higher levels, leading to a consolidation around the $98,000-$99,000 range.

Bitcoin price movements in the second half of the week were largely influenced by the sell-off of LTHs (long-term holders) and the demand from STHs (short-term holders). A recent report by CryptoQuant analyst Darkfost highlighted an interesting trend in the Bitcoin market.

According to Darkfost's analysis, Bitcoin long-term holders, known as LTHs, have been engaging in a selling spree. This selling activity by LTHs has been observed through the asset transfer metric, which tracks the movement of BTC from one address to another.

As LTHs sell their Bitcoin holdings, the asset is being acquired by short-term holders, evident in their increasing demand. This trend has coincided with the recent price rally, suggesting that STHs are driving the bullish momentum to some extent.

However, the analysis also raises a potential concern in relation to the Bitcoin price correction that occurred in December.

According to Darkfost, such an asset transfer, where STHs drive demand while LTHs sell heavily, is typically observed after a local market top or bull cycle peak. This observation might be relevant considering BTC's price record and the recent correction from $108,000.

Analyzing Bitcoin's next move in relation to short-term holders' activity, which is currently driving market demand, Darkfost pinpointed key price regions based on the STH realized price.

The STH realized price, also known as the short-term holder acquisition cost, represents the average acquisition price of all BTC held by short-term holders. It often translates into a physiological zone capable of acting as a support or resistance zone.

With Bitcoin still in the uptrend, $85,000 should be regarded as a vital support level that can sustain the bull market in the case of a retest. Based on data on longer STH acquisition periods ranging from 1 week to 6 months, other significant support levels include $81,000 and $60,000.

However, amidst BTC’s recent recovery, a major resistance awaits at $99,000, which represents the realized price for STH that emerged in 1 week -1 month. This is because as Bitcoin approaches $99,000, these newer entrants are likely to sell in order to recover their initial investments, which may prevent further growth.

In other developments, Darkfost also notes that the short-term holders' spent output profit ratio (SOPR) is currently neutral with a value of 1 after Bitcoin's retracement from $108,000 in December.

This suggests that short-term holders are not selling in profit and are likely to ease up their selling pressure. With the LTH sell-off also being countered by rising demand from these STHs, market liquidity is likely to reduce, which can potentially prevent a full bullish market recovery.

Therefore, Darkfost predicts BTC to remain in consolidation with the possibility of further price correction.

At the time of writing, Bitcoin trades at $98,030 following a gain of 1.27% in the past 24 hours. Meanwhile, the asset’s trading volume is down 15.47% and valued at $36.26 billion.