Briefing
The Bitcoin price has dropped significantly below the Short-Term Holder Realized Price, suggesting a critical shift in market psychology and structure. This breakdown means the average investor who bought Bitcoin in the last five months is now holding an unrealized loss, which historically increases the probability of further selling pressure. When this cohort is underwater, they often capitulate, increasing the likelihood of a deeper correction toward lower structural support levels. This thesis is proven by the Short-Term Holder Realized Price sitting at $112,500, a level Bitcoin is currently trading significantly below.
Context
The market is wondering if the recent price crash represents a temporary shakeout before a rebound or the start of a more prolonged downtrend. The central uncertainty is whether the current price drop has fully flushed out weak hands, or if there is still significant selling risk from investors who bought near the highs. Data is needed to determine the true cost basis of the most active market participants and assess their willingness to sell.
Analysis
The Short-Term Holder Realized Price (STH-RP) is the average price at which all Bitcoin coins held for less than 155 days were last acquired on-chain. This metric functions as the collective cost basis for the most volatile and reactive group of investors. When the Bitcoin price is above the STH-RP, this cohort is in profit, and the price level acts as a strong support. Conversely, when the price falls below the STH-RP, as it has now, these investors are collectively underwater, which historically triggers emotional selling and confirms a loss of short-term market strength.
The current depth of the discount below the STH-RP suggests that short-term investors are facing a notable unrealized loss, a pattern that has often preceded further downside as these holders exit their positions. This indicates that the recent price drop has not yet completed the full shakeout process.
Parameters
- Short-Term Holder Realized Price ∞ $112,500 – This is the average cost basis for all Bitcoin acquired in the last 155 days.
- Short-Term Holder Cohort ∞ Investors holding Bitcoin for less than 155 days – This group is considered the most sensitive to short-term volatility.
- Implied Downside Risk ∞ Increased likelihood of retesting lower structural supports, such as the Active Realized Price.
Outlook
This on-chain signal suggests the near-term market outlook remains fragile, with a bias toward further price contraction. The large group of recent buyers now holding losses creates a structural headwind for any rally attempt, as they will likely use any bounce to exit their positions at their cost basis or a smaller loss. The critical confirming signal to watch is the Active Realized Price (the cost basis of the “economically active” supply). A move toward and a test of this lower support level would confirm the continuation of the current downtrend, while a rapid and sustained reclaim of the $112,500 STH-RP level would signal a swift return to market strength.
Verdict
The loss of the Short-Term Holder Realized Price confirms that short-term market momentum has broken, significantly increasing the risk of a deeper price correction.
