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Cryptocurrency News Articles
Bitcoin Price Recovers From Dip to $60,000 as Short-Term Holders Exit the Market
Oct 10, 2024 at 05:25 pm
The Bitcoin price is still recovering from a significant dip to $60,000 in the early days of October. As bullish investors and long-term holders seize this opportunity
Bitcoin’s price continues to recover from a recent dip to $60,000 in the early days of October. As bullish investors and long-term holders take advantage of this opportunity, new analysis of on-chain data shows that selling pressure has eased substantially, driven by the exodus of short-term holders from the market.
Interestingly, these short-term holders played a direct role in the price dip to $60,000, as the data shows a mass exit during the initial price drop, which further intensified the downward movement.
Recent on-chain analysis using data from the CryptoQuant platform shows a significant decrease in Bitcoin (BTC) held by short-term investors since the beginning of October. While this led to a drop in Bitcoin prices during this period, it may not be a negative development for the cryptocurrency’s future.
This trend can be observed in the accompanying charts, where each instance of price drops is highlighted by an increase in sell-offs from short-term holders, as indicated by the purple bars.
Bitcoin, which concluded September with a price around $65,000, faced a dip as October commenced, amid overall market trepidation. This led to a 7.5% reduction in Bitcoin’s value, bottoming out at $60,100.
Significantly, the data shows that this decline to the $60,000 mark paralleled a rise in the frequency of these purple bars, underscoring the impact of short-term holders selling off their assets.
Moving forward, the sell-off by short-term holders and the resulting price decrease are fostering greater accumulation by long-term holders. This shift promises to establish a price floor around $60,000 in the upcoming weeks and months. It also signals a transfer of Bitcoins into stronger hands that prefer holding over selling.
Furthermore, the departure of a large cohort of short-term holders has resulted in a more favorable average cost for remaining investors. According to on-chain metrics from a verified CryptoQuant analyst, the average cost for holders of one to three months is now approximately $61,633, while those holding between three to six months have an average cost of around $64,459.
As of writing, Bitcoin is trading at $62,130, which places it right between these two key holder groups. Analyst Burak Kesmeci notes that a strong close above the $64,500 threshold would significantly bolster bullish momentum, providing confidence to both short and long-term holders to maintain their positions. Conversely, a drop below $61,600 could trigger additional selling pressure from short-term holders, potentially driving prices back down to the $60,000 level once more.
Bitcoin price chart from Tradingview.com. BTC price drops below $62,000 | Source: BTCUSD on Tradingview.com
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