The Bitcoin price continues to dance within the newly formed $80,000 – $85,000 range, showing some level of indecisiveness in its movement. Since the premier cryptocurrency lost its hold above $90,000, investors have wondered whether the ongoing correction is a “buy the dip” opportunity or the market top is in.
While there is no surefire way to put these doubts away, on-chain data can provide relevant insights into what is to come. The latest on-chain data suggests the highlighted level below is the one to watch before investors return to the market.
Level To Watch Before ‘Buying The Dip’
In a recent post on the X platform, crypto analyst Maartunn shared that it might not be technically secure to reenter the Bitcoin market at the current price. This analysis is based on the movement of the Bitcoin price relative to the current value of the short-term holders’ (STH) average cost basis.
The STH average cost basis metric estimates the average price at which short-term holders (investors who have owned Bitcoin for less than 155 days) acquired their coins. It represents a psychological level for BTC investors and could act as a reference point for price analysis, especially during bull cycles.
Bitcoin usually trades above the short-term holders’ average cost basis during bull markets, signaling substantial buying pressure and optimistic sentiment from short-term investors. On the flip side, when the price of BTC falls beneath this cost basis — as seen in the ongoing correction, it implies that short-term investors are at a loss, which could lead to a sell-off and precipitate significant bearish pressure.
According to data from CryptoQuant, the Bitcoin price is currently 6% below the short-term holders’ average cost basis at $90,950. With the flagship cryptocurrency beneath the realized price of short-term holders, the odds are that BTC price could face further selling pressure as the investor cohort looks to minimize their loss.
Using this logic, Maartunn noted that investors might want to wait till the price of Bitcoin climbs above the STH average cost price before reentering the market. Interestingly, the short-term investors appear to still be loading their bags. Crypto analyst Ali Martinez revealed in a post on X that short-term holders have purchased more than 35,000 BTC in the past 4 days.
Bitcoin Price At A Glance
As of this writing, the price of BTC sits just below the $86,000 mark, reflecting an over 2% jump in the past 24 hours.
Featured image from iStock, chart from TradingView
Opeyemi Sule
Opeyemi is a proficient writer and enthusiast in the exciting and unique cryptocurrency realm. While the digital asset industry was not his first choice, he has remained absolutely drawn since making a foray into the space over two years. Now, Opeyemi takes pride in creating unique pieces unraveling the complexities of blockchain technology and sharing insights on the latest trends in the world of cryptocurrencies.
Opeyemi savors his attraction to the crypto market, which explains why he spends the better parts of his day looking through different price charts. “Looking” is a rather simple way to describe analyzing and interpreting various price patterns and chart formations. However, it appears that is not Opeyemi’s favorite part – in fact, far from it.
Being able to connect what happens on a price chart to on-chain movements and blockchain activities is what keeps Opeyemi ticking. “This emphasizes the intricacies of blockchain technology and the cryptocurrency market,” he would say. Most importantly, Opeyemi thinks of any market insights as the gospel, while recognizing that he is only a messenger.
When he is not clicking away at his keyboard, Opeyemi is most definitely listening to music, playing games, reading a book, or scrolling through X. He likes to think he is not loyal to a particular genre of music, which can be true on many days. However, the fast-rising Afrobeats genre is a staple in Opeyemi’s Spotify Daily Mix.
Meanwhile, Opeyemi is a voracious reader who enjoys a wide category of books – ranging from science fiction, fantasy, and historical, to even romance. He believes that authors like George R. R. Martin and J. K.
Rowling are the greatest of all time when it comes to putting pen to paper. Opeyemi believes his reading of the Harry Potter series twice is proof of that.
Indeed, Opeyemi enjoys spending most of his time within the four walls of his home. However, he also sometimes finds solace in the company of his friends at a bar, a restaurant, or even on a stroll. In essence, Opeyemi’s ambivert (haha! been searching for an opportunity to use the word to describe myself) nature makes him a social chameleon who is able to quickly adapt to different settings.
Opeyemi recognizes the need to constantly develop oneself in order to stay afloat in a competitive and ever-evolving market like crypto. For this reason, he is always in learning mode, ready to pick up the slightest lesson from every situation. Opeyemi is efficient and likes to deliver all that is required of him in time – he believes that “whatever is worth doing at all is worth doing well.” Hence, you will always find him striving to be better.
Ultimately, Opeyemi is a good writer and an even better person who is trying to shed light on an exciting world phenomenon – cryptocurrency. He goes to bed every day with a smile of satisfaction on his face, knowing that he has done his bit of the holy assignment – spreading the crypto gospel to the rest of the world.
Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.
