Key Points
- Bitcoin’s price could potentially see a 30% rally, reaching a new all-time high, following a trendline breakout.
- The Bitcoin Network Value to Transactions (NVT) ratio is at a 2.5-year low, indicating a possible end to the correction period.
Following a rally to $65,500 earlier this week, the price of Bitcoin (BTC) has experienced some retracement and is presently trading around $64,500. Notably, on-chain data analytics platform CryptoQuant has observed that BTC price has tested the short-term holder (STH) realized price.
Bitcoin STH activity forms a crucial indicator during bull markets, as the collective cost basis of this cohort forms long-term price support. Since the Bitcoin bull run began in early 2023, the BTC/USD pair has only dipped under the short-term realized price for a brief period. CryptoQuant suggests that another such dip is now concluding.
Bitcoin’s Potential Rally
CryptoQuant contributor J. A. Maartunn pointed out that the Bitcoin price has recently reclaimed the STH Realized Price. This is a positive sign as short-term holders often increase their positions when Bitcoin returns to their average cost basis, creating a support level.
Maartunn also noted that “since 2023, Bitcoin has twice reclaimed the short-term holder Realized Price, each time leading to gains of at least 30%”. Therefore, if Bitcoin price rallies another 30% from the current level, it could hit another all-time high, possibly exceeding $80,000.
On-chain analytics firm Glassnode also reported a significant drop in profitability for the Short-Term Holder (STH) cohort over the past 30 days, with over 66% of their supply now in unrealized loss.
Bitcoin NVT Ratio at 2.5-Year Low
Crypto Analyst Michael van de Poppe has underscored the significance of the Network Value to Transactions (NVT) ratio for Bitcoin, stating that it has reached its lowest, negative level in the past 2.5 years. This current dip is worse than during the collapse of Luna, last summer’s correction, or even after Bitcoin’s listing. Van de Poppe suggests that the correction period is over and advises investors to prepare for potential market movements.
In the past two weeks, BTC price has made substantial gains, recovering more than 20% from the lows of $53,500. One of the major catalysts has been pro-crypto US presidential candidate Donald Trump surviving a major assassination attempt last weekend. This event has increased Trump’s odds of winning the upcoming election, which is celebrated by the crypto industry.
Additionally, Bitcoin ETFs have seen significant inflows over the past two weeks, compensating for the major FUD around Mt. Gox creditor repayments.
