Short-Term Bitcoin Holders See 10% Profit – Potential Impact on Price?
The Bitcoin market has shown signs of recovery following a sharp 15.7% correction in December 2024. Recent activity among short-term holders (STH) offers insights into potential price movements in the days ahead.
Bitcoin STH MVRV at 1.1 Indicates Modest Profitability
Blockchain analytics firm Glassnode reports that Bitcoin's short-term holder MVRV ratio is currently at 1.1. The Market Value to Realized Value (MVRV) ratio measures whether an asset is overvalued or undervalued and reflects profitability for holders. A value above 1 indicates profit, while below 1 signals a loss.
At a ratio of 1.1, short-term Bitcoin holders—those who acquired BTC within the past 155 days—are seeing an average profit of 10%. With Bitcoin’s recent price gains, these holders might be tempted to sell, creating potential selling pressure and short-term resistance.
However, historical data suggests room for further growth. Peaks of 1.35 (November 2024) and 1.44 (March 2024) indicate that holders might tolerate higher profitability levels before significant selling begins. If Bitcoin’s upward momentum persists, the MVRV ratio could approach these levels, signaling a stronger bullish trend.
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Key Level: BTC Must Stay Above $87,000
The MVRV ratio highlights $87,000 as a critical support level. A slip below this value could lead to a significant drop, with little trading activity between $87,000 and $71,000. This "air pocket" reflects a lack of buy orders, meaning a breach could trigger a rapid decline to $71,000.
At present, Bitcoin is trading at $98,081, up 1.02% in the last 24 hours, with a market cap of $1.94 trillion. Maintaining support above $87,000 is crucial to avoiding a steep downturn.
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Outlook
If Bitcoin bulls sustain the current recovery, there’s potential for the STH MVRV ratio to rise closer to historical highs, reinforcing bullish sentiment. However, increased selling pressure from short-term holders at current profit levels could create headwinds. The next few days will be critical in determining whether Bitcoin maintains its momentum or faces further resistance.