Bitcoin's Price Movement Recently Has Underscored the Importance of the Short-Term Holder (STH) Cost Basis as a Key Momentum Indicator

Bitcoin's price movement recently has underscored the importance of the short-term holder (STH) cost basis as a key momentum indicator. It has emerged as a vital threshold for the sentiment of this market.

The recent price movement of Bitcoin has highlighted the importance of the short-term holder (STH) cost basis as a key momentum indicator. It has emerged as a vital threshold for the sentiment of this market.

And it’s where we are now, as Bitcoin moves in the contracting range of the $72,000 to $92,000 levels, testing the STH cost basis on its way downward, and then finding support on it as it moves upwards toward the $92,000 level again.

If it can make it through the $92,000 level (with the price above it being a confirmation), then the next key level to watch will be the all-time high of just under $65,000. If it can stay above the STH cost basis and the next level is the all-time high.

Price Action and the Critical $92k Threshold

The current relevance of the holder cost basis in the short term has been underlined once again by recent price fluctuations in Bitcoin. Base-ingoi-ing at about $92,000, it is now the most significant and closely watched psychological and technical barrier that exists in today’s market.

Over the last few days, Bitcoin has been on quite the rollercoaster, bouncing off some important levels and trying to power through the $92k wall. Price action above $92k for a sustained period, we think, would be a very bullish sign, with investors and traders anticipating that such a move would set in place the next leg of Bitcoin’s push to higher prices.

On the flip side, if Bitcoin can’t hold above $92k for any length of time, we think the next stop for it may be substantially lower prices.

Supply Gaps and Risk of Downside Movement

Besides the STH cost basis, the current structure of supply will also influence Bitcoin’s price. Recent analysis shows that there are supply gaps extending from the $90K to $69K range, with the most notable supply buildup occurring between $80K and $90K.

However, despite the accumulation in these price ranges, there remains a relative lack of supply in the $70K region, which could have significant implications if Bitcoin’s price begins to drop.

The scant supply around $70,000 means that if Bitcoin breaches key support levels, like $80,000, and doesn’t quickly recover, we could see a faster, more accelerated price drop. The next significant support level is in the low $60,000s. Some technical analysts see a thin supply zone between $66,000 and $68,000, which means Bitcoin could very well plummet through that to hit the next level of supply.

Given the present market structure, holding support at around $80k is critical for the bull case to remain intact. If Bitcoin cannot hold this level, the downside risk becomes acute and leaves traders and investors with no choice but to closely monitor the price action over the next few days.

Long-Term Accumulation and Key Support/Resistance Levels

Immediate price movement is very important, but the Bitcoin long-term view is being influenced almost as much by the potent patterns of accumulation taking shape across various price levels. Over the longer-term, the short-term price action is less important than the Supply/Demand picture for Bitcoin. Thus, we present a six-month supply analysis, which indicates where the price might be headed in the near-term, as well as where it is likely to head in the long-term.

Two main areas of pivotal long-term support and resistance have emerged across our six-month analysis:

1. Accumulation at the price level of $30,000.

2. Accumulation at the price level of $60,000.

The first major accumulation level is pegged at around the $98,000 mark, where about 268,000 BTC has been accrued. This is a significant level as it is just 24% above the current spot price, showing that a lot of holders are banking on Bitcoin moving upwards from here. To me, this looks like a long-term resistance level—a place where, if Bitcoin returns to it, some folks are likely to emerge from hibernation and sell.

Alternatively, a second accumulation cluster has formed at the $62,100 juncture. At that level, investors have acquired 228,000 BTC. This now-massive cluster let’s just call it a ‘hedge’ for argument’s sake since that’s what it really is.

– It’s almost a 22% dip from here.

– It’s a 21.4% ‘bufferish’ area just in case we dip further.

– Significant