FOMO

Bitcoin

Bitcoin (<a href="https://cryptoslate.com/coins/bitcoin/" rel="noopener noreferrer nofollow">BTC</a>) witnessed a notable price surge in the past week, climbing well above the previously coveted $30,000 mark. The sharp increase affected all market participants, especially the short-term holders. These are entities or individuals who’ve held onto their Bitcoin for less than 155 days. Their behavior, particularly during market rallies, offers valuable insights into market sentiment and potential future movements.
Short-Term Holder NUPL (STH-NUPL), or Net Unrealized Profit/Loss, is a specialized metric that zeroes in on unspent transaction outputs (UTXOs) younger than 155 days, serving as a barometer to gauge the sentiment of these newer market participants. When STH-NUPL is positive, it signals that, on average, these holders are sitting on net unrealized gains, indicating their acquisition price is lower than the current market price.
As Bitcoin’s price began its upward trajectory, the STH-NUPL mirrored this optimism. On Oct. 16, the STH-NUPL shifted from a slightly bearish -0.02 to a neutral 0.02 in just 24 hours. This swift change was not just a fleeting moment; by Oct. 24, as Bitcoin continued its bullish run, the STH-NUPL climbed further to 0.169, showcasing the growing confidence among the newer entrants in the market.
<figure id="attachment_368044" aria-describedby="caption-attachment-368044" style="width: 100%" class="wp-caption aligncenter"><img class="size-full wp-image-368044" src="https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-nupl-1-month-1.png" alt="short-term holder nupl 1 month" width="1800" height="1013" srcset="https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-nupl-1-month-1.png 1800w, https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-nupl-1-month-1-300x169.png 300w, https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-nupl-1-month-1-1024x576.png 1024w, https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-nupl-1-month-1-768x432.png 768w, https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-nupl-1-month-1-1536x864.png 1536w" sizes="(max-width: 1800px) 100vw, 1800px">
 <figcaption id="caption-attachment-368044" class="wp-caption-text">
 Graph showing the net unrealized profit/loss for short-term holders from Sep. 26 to Oct. 24, 2023 (Source: <a href="https://studio.glassnode.com/metrics?a=BTC&amp;m=indicators.NuplLess155&amp;s=1695647991&amp;u=1698239991&amp;zoom=30" rel="noopener noreferrer nofollow">Glassnode</a>)
 </figcaption>
</figure>
Another pivotal metric in this context is the Short-Term Holder Market Value to Realized Value (STH-MVRV) ratio. While both metrics provide insights into the sentiment and behavior of short-term holders, STH-NUPL offers a direct measure of their unrealized profit or loss. In contrast, STH-MVRV&nbsp;compares the current market value to the realized value for these holders.
On Oct. 16, the STH-MVRV ascended above the 1 mark, and by Oct. 24, it stood at 1.21, confirming that, on average, short-term holders were in a significant unrealized profit.
<figure id="attachment_368041" aria-describedby="caption-attachment-368041" style="width: 100%" class="wp-caption aligncenter"><img class="wp-image-368041 size-full" src="https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-mvrv-1-month.png" alt="short-term holder mvrv 1 month" width="1800" height="1013" srcset="https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-mvrv-1-month.png 1800w, https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-mvrv-1-month-300x169.png 300w, https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-mvrv-1-month-1024x576.png 1024w, https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-mvrv-1-month-768x432.png 768w, https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-mvrv-1-month-1536x864.png 1536w" sizes="(max-width: 1800px) 100vw, 1800px">
 <figcaption id="caption-attachment-368041" class="wp-caption-text">
 Graph showing the market value to realized value ratio for short-term holders from Sep. 26 to Oct. 24, 2023 (Source: <a href="https://studio.glassnode.com/metrics?a=BTC&amp;m=market.MvrvLess155&amp;s=1695647838&amp;u=1698239838&amp;zoom=30" rel="noopener noreferrer nofollow">Glassnode</a>)
 </figcaption>
</figure>
However, the behavior of short-term holders wasn’t solely characterized by optimism. The short-term holder supply, which reflects the amount of Bitcoin held by this group, began to decline rapidly as Bitcoin’s price started its upward trajectory. From 2.354 million BTC on Oct. 17, it decreased to 2.339 million BTC by Oct. 22. This trend mirrors the increase in exchange deposits from short-term holders, as highlighted in a recent CryptoSlate <a href="https://cryptoslate.com/insights/bitcoin-price-surges-4-as-short-term-holders-rush-to-sell/" rel="noopener noreferrer nofollow">analysis</a>, suggesting that many were capitalizing on the price surge to realize their profits. Yet, the narrative took another twist as the short-term holder supply rebounded, reaching 2.368 million BTC by Oct. 24.
<figure id="attachment_368037" aria-describedby="caption-attachment-368037" style="width: 100%" class="wp-caption aligncenter"><img class="size-full wp-image-368037" src="https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-supply-1mo.png" alt="short-term holder bitcoin supply 1mo" width="1800" height="1013" srcset="https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-supply-1mo.png 1800w, https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-supply-1mo-300x169.png 300w, https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-supply-1mo-1024x576.png 1024w, https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-supply-1mo-768x432.png 768w, https://cryptoslate.com/wp-content/uploads/2023/10/short-term-holder-supply-1mo-1536x864.png 1536w" sizes="(max-width: 1800px) 100vw, 1800px">
 <figcaption id="caption-attachment-368037" class="wp-caption-text">
 Graph showing the supply of Bitcoin held by short-term holders from Sep. 26 to Oct. 24, 2023 (Source: <a href="https://studio.glassnode.com/metrics?a=BTC&amp;category=Long%2FShort%20Term&amp;m=supply.SthSum&amp;s=1695647543&amp;u=1698239543&amp;zoom=30" rel="noopener noreferrer nofollow">Glassnode</a>)
 </figcaption>
</figure>
When analyzed collectively, these metrics paint a multifaceted picture of the market. The positive STH-NUPL and STH-MVRV values indicate bullish sentiment among short-term holders. However, the fluctuating short-term holder supply suggests a mix of profit-taking and renewed interest. The initial drop in supply, coupled with increased exchange deposits, points to a significant portion of this group cashing in on their gains. However, the subsequent rise suggests either a return of previous holders or an influx of new ones, possibly driven by FOMO or confidence in Bitcoin’s continued upward trajectory.
The post <a rel="noopener noreferrer nofollow" href="https://cryptoslate.com/bitcoin-is-soaring-and-short-term-holders-are-here-for-the-ride/">Bitcoin is soaring, and short-term holders are here for the ride</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://cryptoslate.com">CryptoSlate</a>.

Bitcoin is soaring, and short-term holders are here for the ride

CryptoSlate

Other articles published on Oct 25, 2023

What Does ‘Crypto ATM Regulation’ of California States?

SHIB chart flashes rare ‘buy’ signal; What’s next for Shiba Inu?

Treasury Department’s FinCEN ‘Alerts’ Crypto’s Use to Finance Terrorism

FLOKI’s Critical Report and Negative News from Santiment

SKALE Outperforms Major Blockchains as the Fastest

Unprecedented series of Bitcoin inflows and outflows observed across exchanges

Join our free newsletter for daily crypto updates!