Bitcoin’s recent rally has breathed new life into the market, with short-term holders emerging from the red. According to a Glassnode report, a staggering 75% of short-term held Bitcoin supply is now in profit. This significant shift in sentiment could provide additional upward momentum for the world’s largest cryptocurrency.
The short-term holder cohort is a key indicator of market sentiment and buying pressure. Their recent losses, which exceeded 90% of their holdings during late July, have now turned into substantial gains. This turnaround is a testament to Bitcoin’s resilience and its ability to recover from market downturns.
Despite overcoming a $3.9 billion Bitcoin futures expiry, the cryptocurrency managed to hold above a crucial support level. Renowned crypto analyst Rekt Capital has identified $65,000 as a key support level, suggesting that Bitcoin is likely to consolidate within a range between $65,000 and $71,500.
However, the road to higher prices is not without obstacles. Bitcoin faces significant resistance at the psychologically important $68,000 mark. If the cryptocurrency manages to breach this level, it could trigger a wave of liquidations for short sellers, potentially adding fuel to the rally. According to CoinGlass data, nearly $700 million worth of leveraged short positions are at risk above $68,000.
While the potential for a short squeeze is enticing, the slowing inflow into US spot Bitcoin ETFs might temper expectations. After a strong start, inflows have been gradually declining, raising questions about the sustainability of the current rally.
As the market continues to evolve, investors will be closely watching Bitcoin’s performance against the $68,000 resistance level. A successful breakout could ignite a new bull run, while a failure to overcome this hurdle might lead to a period of consolidation.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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