BTC Needs to Dip to $19.3K to Cool Profit-Taking: New Data

• Bitcoin (BTC) may need to dip to $19.3K to cool off profits from short-term holders, according to new data from Glassnode.
• The market value to realized value (MVRV) metric indicates that BTC price resistance is being dictated by these short-term holders.
• A return below $20,000 would reset the STH-MVRV back to 1.0, indicating that spot prices have returned to the cost basis of this cohort of new buyers.

Bitcoin Profit Taking May Be Dictating Price Resistance

Short-term Bitcoin holders have been getting active, and their profitability may be underscoring current support and resistance levels, Glassnode reveals. According to the analytics firm’s ‚The Week On-Chain‘ newsletter, it appears that profit taking by these holders has reinforced resistance at the $23,800 level.

Market Value To Realized Value Metric

The Market Value To Realized Value (MVRV) metric compares the Bitcoin market cap with coins moved on chain in order to gauge if prices are above or below ‘fair value’ and assess market profitability.

Short Term Holders Affecting Price Resistance

When BTC/USD started climbing towards $25,000, short term holders – those holding coins for 155 days or less – began seeing substantial profits as indicated by a rise in MVRV above 1.2.

Profit Taking Rejects Price At $23.8k Level

The possibility of STHs taking profits grew during this period and when it hit a value of 1.2 at the same time as $23.8k appeared as an area of price resistance it seemed clear that profit taking had taken place here.

Return To Below $20k Would Reset Key Metric

For a reset of this key metric measuring speculative profit taking, Glassnode suggests BTC would need to return below $20k in order for STH-MVRV values go back down to 1.0 which would indicate spot prices returning back close their cost basis for this cohort of buyers.