Bitcoin is showing some positive signs, according to analyst James Van Straten. He’s looking at a specific metric – the Realized Price of short-term Bitcoin holders (STHs) – and what it means for the future of the cryptocurrency’s price.
Understanding the Metric
The “Realized Price” is a fancy way of saying the average cost basis of Bitcoin for a specific group of investors. Think of it as the average price people paid for their Bitcoin. If the current Bitcoin price is higher than the Realized Price, those investors are generally making a profit. If it’s lower, they’re losing money.
Van Straten focuses on short-term holders (STHs) – people who bought Bitcoin within the last 155 days. These are considered the “weak hands” of the market, more likely to sell quickly than long-term holders.
The Chart Speaks Volumes
Van Straten shared a chart showing the STH Realized Price and its 7-day change over time. The key takeaway? The Realized Price has been rising as Bitcoin’s price has rallied. This is expected, as new buyers (STHs) are paying increasingly higher prices during a bull market. Crucially, the rate of increase in the Realized Price has slowed down recently.
Historically, a rapidly increasing STH Realized Price has often signaled the end of a Bitcoin bull run. The recent slowdown suggests this rapid growth phase might be over, potentially paving the way for a more sustainable bull market.
What This Means for Bitcoin
The fact that Bitcoin’s price is currently above the STH Realized Price is a good sign, indicating that short-term holders are generally profitable. Combined with the cooling-off of the 7-day rate of change in the Realized Price, this suggests a healthier, potentially more sustainable, bull market could be ahead.
Note: At the time of writing, Bitcoin was trading around $98,400, down slightly over the past week. This short-term dip doesn’t necessarily contradict the positive long-term indicators discussed above./p>
