Bitcoin (BTC) has experienced a significant drop below $64,000, which is the short-term holder realized price. This decline suggests that Bitcoin may continue to decrease to levels that haven’t been seen in 49 days, according to CryptoQuant, a cryptocurrency analysis firm.
In a post on June 21, CryptoQuant stated that Bitcoin is now trading below the critical support level of $65.8K, falling below $64K. This indicates a potential correction of 8% to 12% towards $60K, a level that hasn’t been breached since May 3 when Bitcoin was valued at $59,122, according to CoinMarketCap data.
On June 22, Bitcoin’s decline caused it to drop 2% to $63,442, falling below the short-term holder realized price at that time, which was $64,230, according to LookIntoBitcoin data. The short-term holder realized price (STH-RP) is an important indicator for traders as it represents the aggregate cost basis of Bitcoin wallets that hold the cryptocurrency for 155 days or less.
The STH-RP has historically acted as a solid support level during bull markets since early 2023. In recent weeks, Bitcoin’s price has tested the STH-RP multiple times, but breaching this level raises concerns among traders about the possibility of further price decline.
Crypto Caesar, a pseudonymous crypto trader, wrote on June 19 that Bitcoin’s short-term holder realized price generally acts as support in upward trending markets. LookIntoBitcoin founder Phillip Swift added, “Let’s see if it holds.”
If Bitcoin’s price were to drop to $60,000, it would result in a loss of $1.64 billion in long positions, according to CoinGlass data.
Despite the recent decline, there is speculation among traders about a potential upside swing for Bitcoin. The cryptocurrency has been hovering around $65,000 for some time now, prompting analysts to consider what may happen next, especially after the launch of spot Bitcoin ETFs in the United States in January and the Bitcoin halving in April.
On June 13, it was reported that Bitcoin has been experiencing its longest period of consolidation in 92 days. Analysts believe that this extended period of stability could be setting Bitcoin up for a massive upside rally.
Ki Young Ju, the founder and CEO of CryptoQuant, believes that Bitcoin’s network fundamentals could support a market cap three times its current size compared to the last cyclical top.
In May, Young Ju referred to a chart comparing Bitcoin’s price and the associated hash rate to market capitalization ratio. This highlights the ongoing volatility of Bitcoin and the resilience of its network. If this ratio continues to grow, Young Ju believes it could potentially sustain Bitcoin’s price at $265,000.
Overall, while Bitcoin has experienced a recent decline, there is still optimism among traders about its potential for an upward swing in the future.