Originally published on: October 09, 2024
Bitcoin’s recent price action has left investors on edge as the leading cryptocurrency struggles to break free from a narrow trading range between $63,600 and $62,843. Despite hovering below the 50-day EMA level, BTC managed to hold above the 200-day EMA on the 4-hour chart.
Technical indicators like Bollinger Bands suggest that BTC might be oversold, signaling potential short-term volatility ahead. With short-term holders (STH) currently in focus, market analyst Burak Kesmeci warns that a dip below $61,600 could trigger panic selling among this group.
Kesmeci points out that the average cost for short-term Bitcoin holders ranges between $61,633 and $64,459, with BTC’s price teetering on the edge of this range. If the $61,600 support level is breached, it could put short-term holders’ resolve to the test.
The data from CryptoQuant indicates that most short-term holders are barely breaking even, with the majority not realizing profits at the moment. This precarious situation could lead to a cascade of panic selling if BTC fails to hold above the critical level.
However, historical data shows that Bitcoin tends to perform well in the fourth quarter, despite occasional short-term setbacks. According to Bitcoin advocate Timothy Peterson, Q4 has historically been positive for BTC, with only a few exceptions during bear markets in 2018, 2019, and 2022.
While short-term holders may face challenges in the near term, staying the course could yield positive results in the long run. As Bitcoin enters a pivotal phase, investors must brace themselves for potential turbulence ahead.
