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Support level for Bitcoin short-term holders is $24,400

03 May, 2023
Support level

On the heels of Bitcoin's 80% increase in 2023, crypto exchanges have experienced an influx of coins brought on by some holders wanting to take profits. On certain days, it reached a rate of 30,000 BTC/month. Peak indicators either coincided with a correction or preceded one.

Image source: glassnode.com

That rate has now dropped to 22,300 BTC/month, although pressure remains on the pioneer cryptocurrency's price. Buyers are primarily short-term holders (STH) who are rushing to lock in profits. They recently made up more than 60% of all realised profit.

Image source: glassnode.com

The analytical agency Glassnode used the MVRV indicator (an estimate of the average unrealised profit) to identify the point at which STH enthusiasm dries up. Their analysis found $24,400 to be the level at which the cohort of STHs will reach a breakeven point if the correction continues.

Image source: glassnode.com

STHs' desire to lock in their profits is a leading factor for why Bitcoin's price rise is currently being restrained. We previously noted that, after selling part of their reserves on the price rise, the whales have begun to accumulate again.

Image source: StormGain cryptocurrency exchange

It's also worth noting that with the bankruptcy of the fourth-largest bank in the United States in 2023 (JPMorgan took over First Republic Bank on 1 May), the number of daily transactions on the Bitcoin network set a new all-time high after it surpassed 426,000. The previous high had been reached during the 2017 rally when there were 379,000 transactions per day.

It remains to be seen what the Fed will choose to do at its meeting today. Some experts suggest that we'll see the last interest rate hike this year, while others believe that the central bank's monetary policy tightening is over. If the Fed leaves its key interest rate unchanged, Bitcoin's price will most likely begin to rise again.


StormGain Analytical Group 
(platform for trading, exchanging and storing cryptocurrency)

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