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Bitcoin price's positive begin to the brand new yr was in jeopardy on Saturday, January 3, because the cryptocurrency market reacted negatively to the United States' recent military motion in Venezuela. The flagship cryptocurrency briefly lost its hold above $90,000 after US President Donald Trump announced the capture of Venezuelan leader Nicolas Maduro.
While the long-term impact of the recent US military strikes on the cryptocurrency market continues to be unknown, Bitcoin price appears to be preparing for an uptrend within the short term. Interestingly, the newest on-chain data suggests that the cryptocurrency market leader could potentially hit a correction low.
Could a bottom form in BTC price?
Crypto analyst Darkfost revealed in a quicktake post on the CryptoQuant platform that probably the most reactive group of Bitcoin investors, the so-called short-term holders (STHs), remain under pressure as BTC price fluctuates between $85,000 and $92,000.
Darkfost shared that the estimated cost of short-term Bitcoin holders is around $103,000 after considering the on-chain impact of Coinbase's recent large BTC transfers. Based on data from CryptoQuant, the common unrealized losses for this investor cohort are around 15%.
As Darkfost explained in its quicktake post, this number was determined based on the share deviation from the associated fee base for short-term holders. “With this approach, it is feasible to discover periods when probably the most reactive and sensitive investors out there are under stress,” said the on-chain analyst.
Source: CryptoQuant
Historically, forming a correction low for the leading cryptocurrency is usually the following step when short-term Bitcoin holders experience significant declines and their average unrealized losses are around 15%. According to Darkfost, BTC could face the same situation here.
However, the crypto analyst identified that this signal might be false, especially if Bitcoin price is in the beginning of an prolonged bear market. A deep or prolonged bear market could cause STH's unrealized losses to stay above 15% for prolonged periods or open the door to a sustained payout.
Bitcoin price at a look
As of this writing, the worth of BTC is around $91,160, up greater than 1% within the last 24 hours. According to data from CoinGecko, the flagship cryptocurrency is up nearly 4% over the past seven days.
The price of BTC within the each day timeframe | Source: BTCUSDT chart on TradingView
Featured image from iStock, chart from TradingView
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