Bitcoin’s recent price dip below $60,000 has raised concerns about whether the asset’s impressive bull run this year might be coming to an end earlier than anticipated. However, Lead Glassnode analyst James Check reassures bulls that there is very little to worry about. In a video analysis, Check discussed various on-chain metrics related to short-term Bitcoin holders, who acquired their coins within the last five months. He pointed out that Bitcoin’s short-term holder MVRV ratio is approaching 1.0, indicating that its unrealized profit and loss have reached a break-even point. This level can act as support after a bull market dip, but also serve as major resistance during bear markets.
Additionally, the short-term holder SOPR has dipped below 1.0, indicating that short-term holders are beginning to realize more losses than profits. If the SOPR continues to fall significantly below this level without recovering, it could signal the beginning of a sustained bear market. Recent data shows that short-term holders have experienced substantial losses, which could be attributed to panic selling by new buyers in response to escalating tensions between Iran and Israel. Check views this behavior as contrarian, suggesting that it may actually be positive for the market in the long run.
Despite the short-term fluctuations, Bitcoin’s long-term momentum remains positive according to metrics like the AVIV momentum indicator. While the 30-day timeframe shows a cooldown for a “proper reset,” the indicator remains in positive territory overall. Check believes that the financial impact of the Bitcoin halving may be overhyped, as the daily BTC issued to miners is just a fraction of the overall market volume. He emphasizes that the narrative surrounding the halving is more significant than its actual size in terms of market impact.
In terms of price analysis, Check had previously mentioned that Bitcoin’s price may become “top-heavy” if it falls below $58,800. At the time of writing, the asset was trading at $64,000. Check highlights that for a resilient uptrend, the short-term holder cost basis should hold around the $58,000 to $59,000 range. The AVIV Momentum indicator, which measures the velocity of price changes, continues to show positive trends across all timeframes, indicating ongoing positive momentum in the market. The cooldown in the 30-day indicator is seen as a healthy reset for the market.
Overall, while short-term volatility may cause temporary dips in Bitcoin’s price, the long-term outlook remains positive according to Check’s analysis. He advises investors to focus on the broader market trends and not get caught up in short-term fluctuations. Despite concerns about the potential end of the bull run, Check believes that Bitcoin’s resilience and positive momentum indicators suggest that the asset may continue its upward trajectory in the long run. As investors navigate market uncertainties, staying informed about both on-chain metrics and broader market trends will be essential for making informed investment decisions.
