Key Takeaways

• Bitcoin is likely to surpass the $120,000 mark as it alleviates sales pressure from long-term holders.

• Short-term holders are absorbing losses, leading to a more stable market signal.

• Neutral long-term holder flows can potentially trigger a significant breakout.

Bitcoin (BTC) has crossed the $120,000 threshold for the first time since mid-August, which indicates that on-chain data may be entering an accumulation phase that eases the sales pressure from long-term holders.

As reported by GlassNode, the Short-Term Holder Realized Value (RVT) ratio has been gradually decreasing since May, showing a cooling of speculative excess. Typically, increased RVT levels align with overheated markets, but a contraction into the “full market detox” zone suggests that short-term traders are experiencing lower profits compared to overall network activity. If this trend continues, it might create a more favorable environment for accumulation as investors gain clearer market direction.

In terms of supply, the balance between long-term holders and institutional inflows remains crucial. After months of consistent distribution, recent data indicate that the net position change of long-term holders has stabilized into neutral territory.

This shift hints that the significant profit-taking from the recent rally might be diminishing, with potential exchange-traded funds (ETFs) and new inflows acting as key drivers of short-term momentum.

If this cooling supply trend persists, Bitcoin may establish a solid base around the $115,000 to $120,000 range, reminiscent of the integration phase noted in March and April.

With a decrease in long-term holder distributions and a cooling off of short-term activities, analyses suggest the market might be gearing up for a critical breakout attempt.

Short-Term Holder Losses Show Signs of Absorption

While the dynamics of long-term supply appear relaxed, actions from short-term investors also send vital signals. Reportedly, short-term holders have been under stress, with the Short-Term Holder SOPR dipping to 0.992 until September. This indicated that speculative wallets often faced losses, which generally reflects weaker hands exiting the market.

However, in the past week, this metric has slightly rebounded to 0.995, although it remains lower than August’s 0.998, marking an emerging stabilization.

History suggests that such resets can unfold in two ways: either an extensive loss realization that contributes to a corrective phase or a “healthy reset” that quickly absorbs the selling pressure. With BTC maintaining integration above $115,000, the recovery of Short-Term Holder SOPR might signal market resilience ahead of a new bullish phase.

This article does not offer investment advice or recommendations. All investment and trading activities involve risk, and readers are encouraged to conduct their own research before making any decisions.