Analytics firm Glassnode has revealed that short-term holders (STHs) may be responsible for the recent speculative behavior in the bitcoin market. Glassnode’s market value to realized value (MVRV) metric has identified the possibility of short-term corrections when STH-MVRV is above 1.2, signalling a 20% unrealized profit. At its peak in mid-March, STH-MVRV hit 1.37, close to the “macro top” territory and the highest score since October 2021. However, as of May 2, STH-MVRV measured 1.15 and is falling towards its 1.0 equilibrium point. For it to complete, BTC/USD would need to fall to $24,400.

Short-term Holder Unrealized Profit versus Loss

Backing up STH-MVRV is a similar trend in the ratio of short-term holder unrealized profit versus loss. This trend also favors $24,400 as a bullish inflection point.

Influx of New Market Entrants

In 2023, long-term holders (LTHs) have been selling into rallies, unloading bitcoin supply onto new market entrants. This has increased the overall share of bitcoin classed as “young supply,” or that active at most six months prior. The rising share of younger supply during a rally is an indication of capital flowing into the market, leading to a net transfer of cheap/old coins to new buyers at higher prices.

LTHs Remain in Control of Bitcoin Supply

Overall, LTHs remain in control of the supply, with net new entries “relatively soft.” Glassnode recommends that a deeper market correction could develop, and a price of $24.4K level would bring STH-MVRV back to a break-even value of 1.0, which has shown to be a point of support in up-trending markets. Recent resistance was found at the $30k level, corresponding with STH-MVRV hitting 1.33, and putting new investors at an average 33% profit.

Analysis

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