Bitcoin’s recent price drop below $60,000 has caused concerns about whether the asset’s impressive bull run this year may be coming to an early end. However, Lead Glassnode analyst James Check reassures investors that there is very little to worry about. In a video analysis, Check reviewed various on-chain metrics related to short-term Bitcoin holders who acquired their coins less than five months ago. He noted that Bitcoin’s short-term holder MVRV ratio is approaching 1.0, indicating that its unrealized profit and loss have reached a break-even point. This level can serve as support after a bull market dip but also as major resistance during bear markets when most Bitcoin holders are underwater.
Additionally, the short-term holder SOPR has also dipped below 1.0, suggesting that short-term holders are now realizing more losses than profits. If SOPR continues to decline significantly below this level, it could signal the start of a sustained bear market. Recent data shows that short-term holders have experienced substantial losses, indicating panic selling among new buyers in response to rising conflict between Iran and Israel. Check views this behavior as a positive sign for contrarian investors, as it indicates that people are doing the wrong thing at the wrong time.
Check previously mentioned that Bitcoin’s price could become “top-heavy” if it falls below $58,800. At the time of writing, the asset is trading at $64,000. Despite the short-term fluctuations, other metrics such as the AVIV momentum indicator suggest that Bitcoin’s long-term price momentum remains positive. The indicator is in positive territory, with all time frames showing higher altitudes on each successive peak. The current cooldown on the faster 30-day indicator is seen as a necessary reset for the market.
In terms of the Bitcoin halving, Check believes that its financial impact may be overhyped. He points out that the daily BTC issued to miners is only a tiny fraction of the overall market compared to other metrics such as Bitcoin futures volume, spot volume, and ETF trade volume. Check emphasizes that the size of the halving is more of a narrative game than a significant event in terms of market size. Overall, the analysis suggests that Bitcoin’s long-term momentum remains positive, despite short-term fluctuations and market uncertainties.
In conclusion, while Bitcoin’s recent price drop has sparked concerns among investors, analysts like James Check remain optimistic about the asset’s long-term prospects. The on-chain metrics indicate that the current market dip could be a temporary setback rather than the end of the bull run. Contrarian indicators such as short-term holder behavior and the AVIV momentum indicator suggest that there is still positive momentum in the market. As Bitcoin continues to navigate through volatility and uncertainty, investors are advised to focus on the long-term trends and factors that drive the asset’s value. Ultimately, the future of Bitcoin remains promising, with potential for further growth and development in the digital asset space.
