Blockchain

Lookonchain, a blockchain tracking platform, now reveals that one stablecoin holder lost over $100,000 after panic selling USDR, a stablecoin issued on the Polygon network, for zero USDC after it depegged on October 11. The stablecoin holder swapped 131,350 USDR for zero USDC, allowing an MEV bot to swoop in and claim $107,000 in profit. 

The USDR Depegging, Stablecoin Falls To $0.50

The stablecoin is issued by Tangible protocol, a decentralized finance (DeFi) protocol that claims to be tokenizing housing and other real-world assets. Due to the immutable nature of the Polygon network, the USDR holder is now at a loss. 

All on-chain transactions cannot be reversed unless there is a network rollback, which will unwind other transactions as a result should validators choose to do so. However, considering how public ledgers operate, it is improbable that a rollback will be done to recover funds. 

There has yet to be any feedback from the MEV bot operator on whether they can refund the affected user. Since the error was on the swapper’s side and not the hack, the community’s response to this mistake remains largely muted.

Real USD, USDR, is a stablecoin backed by a blend of other crypto assets and real estate. Considering the stablecoin’s construction, USDT is interest-bearing, meaning holders receive rewards. It was meant to track the USD but lost its peg on October 11 after a wave of redemptions drained the project’s treasury of its liquid assets, including DAI. 

By the close of October 11, USDR was trading versus the USD at around $0.53, a near 50% drop, triggering panic. Moments after the rapid withdrawal of DAI and liquid assets from its treasury, the team explained that USDR fell to as low as $0.50 before recovering. 

Tangible Finance Working On A Recovery Plan

Despite the depegging, the USDR issuer said it is working on making holders whole, saying the crisis is mainly “liquidity related.” It also attempted to assuage holders, assuring that “the real estate and digital assets backing USDR still exist and will be used to support redemptions.”

Updating the community on X, the issuer said it is not “going anywhere” and is working on a “plan”:

Tangible isn’t going anywhere. We have a flywheel that works and plans to continue building within that. A critical part of our shared future success is maintaining the trust we’ve established with our users over the past year, which we hope to maintain through the plan below.

Beyond the panic selling and one holder losing over $100,000 to an MEV bot, the extent of the USDR depeg has not been fully quantified. As of October 12, Polyscan data shows over 2,400 USDR holders. In total, they cumulatively control slightly over 45.5 million of the stablecoin.

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The US Commodity Futures Trading Commission (CFTC) has taken legal action against Voyager Digital and its former CEO, Stephen Ehrlich. 

The CFTC filed a complaint in the US District Court for the Southern District of New York, alleging fraud and registration failures related to the operation of the Voyager digital asset platform and an unregistered commodity pool.

Voyager Faces Legal Action For ‘Misleading Customers’

According to the CFTC, Ehrlich falsely marketed the Voyager platform as a safe haven for high-yield returns, deceiving customers to purchase and store digital assets. 

Per the filing, Voyager allegedly took “reckless risks” with customers’ assets, leading to Voyager’s bankruptcy and significant customer losses. The lawsuit seeks various penalties, including restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act.

In a separate but related action, the Federal Trade Commission (FTC) has charged Voyager and Stephen Ehrlich with violating the FTC Act and the Gramm-Leach-Bliley Act. 

The FTC alleges that the company falsely claimed customers’ accounts were insured by the Federal Deposit Insurance Corporation (FDIC) and misled consumers about the safety of their deposits.

The FTC’s complaint states that Voyager enticed customers to deposit funds by assuring them of the safety of their assets on the platform. However, Voyager was neither a bank nor a financial institution, and the deposits were not eligible for FDIC insurance. 

The FTC alleges that consumers suffered significant losses when Voyager experienced financial difficulties, including being locked out of their accounts and losing over $1 billion in cryptocurrency assets.

Stephen Ehrlich Rejects Settlement 

Voyager and its affiliates will be permanently banned from handling consumers’ assets and offering related services as part of a proposed settlement. 

The companies have also agreed to a judgment of $1.65 billion, which will be suspended to allow Voyager to return the remaining assets to consumers during the bankruptcy proceedings. 

Stephen Ehrlich, however, has not agreed to a settlement, and the FTC’s case against him will proceed in federal court.

The FTC’s complaint further alleges that Ehrlich transferred millions of dollars to his wife, Francine Ehrlich, including funds linked to the alleged unlawful conduct. 

The proposed settlement also prohibits Voyager and its affiliates from misrepresenting product benefits, making false representations to obtain financial information, and disclosing consumer information without consent.

Both regulatory bodies are seeking to hold Voyager, Stephen Ehrlich, and other involved parties accountable for their alleged deceptive practices and violations of financial regulations. 

Featured image from Shutterstock, chart from TradingView.com 

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Taking to X on October 12, Zoran Kole, a trader, said reasonable bids for Bitcoin stand at around $17,000 and $18,000. Though Kole didn’t provide timelines for retraining these levels, the prediction means the coin could slide 35% to around December 2022 territory if the prediction comes true.

Will BTC Drop To December 2022 Levels?

The position the trader takes appears contrarian and opposes every optimistic preview laid out by bulls. Bitcoin finds itself in a precarious position and is primarily bearish at spot rates.

Looking at the daily chart, the coin is down approximately 17% from July peaks and trickling lower at spot rates. As it is, there could be more drawdown, considering that the coin has been performing in the past few hours. To illustrate, Bitcoin breached the $27,000 support on October 11 and is edging lower at spot rates, confirming the losses from early this week.

From a top-down preview, it also appears that BTC bulls are under pressure and have failed to unwind losses of August 17. The flash crash in mid-August saw the coin breach critical support–now resistance around $28,300. Bitcoin has since failed to break out above this level. There was an attempt on October 2, but bears flew in, reversing all gains. 

Bitcoin is within the August 17 and 18 trade range while trading volume, or participation, remains relatively suppressed. From volume analysis, this is bearish. However, how fast the coin can recover or break even lower depends on how prices react at immediate support at around $25,000 registered in mid-September.

Bulls Expect Bitcoin Halving And ETFs To Drive Prices

The odds of Bitcoin dropping to the $17,000 and $18,000 zone, subsequently confirming Kole’s prediction, will be elevated if sellers press on, breaching $25,000. Bulls remain confident, citing fundamental factors mostly revolving around 2024’s Bitcoin halving event, where the network will slash miner rewards by half from 6.25 BTC.

At the same time, supporters expect the Securities and Exchange Commission (SEC) to approve the country’s first spot Bitcoin Exchange-Traded Fund (ETF).

In a recent X post, the chief policy officer at Blockchain Association, Jake Chervinsky, expressed optimism about the SEC approving a spot Bitcoin ETF. The policy expert said there are all signs of the agency preparing for the derivatives product.

This is especially considering recent revisions made by ARK Investment Management on its prospectus. Eric Balchunas, an ETF analyst, said ARK appeared to have changed its Net Asset Value (NAV), which the agency had commented on. ARK further clarifies that their Trust’s assets are segregated and stored by a qualified custodian.

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Ethereum has struggled alongside Bitcoin through the current bear market climate but this has not stopped bullish predictions for the digital asset. The most recent bullish prediction comes from British multinational bank Standard Chartered which believes that the Ethereum price could climb higher than  $8,000.

Factors That Could Trigger The Rise

Geoff Kendrick, Head of Digital Assets Research at Standard Chartered Bank has revealed his forecast for the Ethereum price in a research note. According to the researcher, he sees big things in the future of the digital asset which could climb higher than $8,000 in the coming years.

Talking about the asset’s valuation, Kendrick points toward the many use cases for Ethereum that have emerged over the years but also sees more use cases emerging as time goes on. One of those is the much-coveted gaming and asset tokenization sector.

Also, the Standard Chartered researcher said that they expect that Ethereum will see more growth than the pioneer cryptocurrency, Bitcoin. While he expects Bitcoin to rise 3.5x, they believe Ethereum will rise 5 from current levels.

“We think the path higher for ETH prices may take longer than for BTC, but we see ETH eventually reaching a higher price multiple than BTC relative to current levels (5.0x versus 3.5x),” the researcher said.

He also believes that Ethereum would go on to further register its dominance in the space, especially with the Layer 2 blockchains such as Arbitrum that have popped up to enhance the network. This, he believes, would lead to an increase in the Ethereum profit-earnings ratio (P/E ratio).

Ethereum Could Climb Above $8,000

In terms of actual dollar values, $8,000 is not the only figure that the researcher dropped for the Ethereum price. The expectations for the digital asset exceed this four-digit figure right into the five-digit territory as Kendrick believes ETH could rise to anywhere between $26,000 and $35,000.

As for when this might happen, the researcher seems to be targeting the next bull market as he expects the factors that will drive this value growth to happen between 2025-2026. “We see the $8,000 level as a stepping stone to our long-term ‘structural’ valuation estimate of $26,000-$35,000,” he said in the note. Then beyond this, the researcher expects the price to continue to rise.

This is not the first time that Kendrick has released a bullish prediction for cryptocurrencies. He previously said he expects the price of Bitcoin to reach $120,000 and the entire crypto market to rise as well. However, it seems the researcher is much more bullish on ETH.

Not everyone has provided bullish forecasts for ETH though. One crypto analyst actually believes that the digital asset is set for more decline. In the analyst, FieryTrading suggests that Ethereum’s price could fall as low as $900.

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Recent transactions by Arca, a prominent investment firm, involving Arbitrum native token ARB, have again put them under the spotlight. According to on-chain tracking platform Lookonchain, the firm has suffered a substantial loss nearing half a million recently.

Arca’s Arbitrum Shipment to Binance

Lookonchain reported earlier today that Arca transferred roughly 1.49 million ARB tokens to Binance. With a value of around $1.21 million, this transaction indicates a possible liquidation of Arca’s holdings in Arbitrum (ARB).

If this were the case, according to Lookonchain, it would translate into a significant loss of $465,000 for the investment firm. Notably, as significant as it seems, the ARB token transaction isn’t an isolated case of Arca’s investments not panning out as anticipated. Loononchain noted: “Arca’s investment this year appears to be terrible.”

An analytical dive into the firm’s past decisions has shown similar patterns. For instance, Arca’s foray into GMX and DYDX left them with losses of $231,000 and $304,000, respectively. Their stakes in DPX and SYN further compounded their negative streak, resulting in losses of $142,000 and $107,000.

Arca (@arca) deposited 1.49M $ARB ($1.21M) to #Binance at a price of $0.815 5 hours ago and is expected to lose $465K.

Arca’s investment this year appears to be terrible.

Lost $213K on $GMX, $304K on $DYDX, $142K on $DPX, $107K on $SYN;

Only made a profit of $294K on $RDNT. pic.twitter.com/qPSuZc4MSA

— Lookonchain (@lookonchain) October 12, 2023

Silver Linings Amid Investment Storms

However, it’s crucial to note that not all is gloomy for Arca. Investment is as much about strategy as it is about timing, and while the firm has faced setbacks, they’ve also had its share of victories.

An example is their investment in RDNT, which proved profitable, netting them a profit of $294,000, according to the on-chain tracking platform.

Furthermore, Arca is not alone in its recent losses with Arbitrum. The ARB token has seen a decline of nearly 10% over the past week and 1.2% in just the last day, ensnaring numerous traders in its bearish trajectory.

Data from Coinglass indicates that Arbitrum has witnessed total liquidations amounting to approximately $376,160 in the past 24 hours alone. A significant portion of these liquidations were long positions, valued at $282,120, compared to short positions at a mere $93,840.

This data suggests that many traders were optimistic about ARB’s potential to follow a bullish trend. However, starkly contrasting their expectations, they faced significant losses.

When writing, the ARB token is trading at $0.72, marking a significant drop of roughly 90% from its all-time high of $8.67 recorded just seven months ago in March.

Featured image from iStock, Chart from TradingView

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In a recent research report from JPMorgan, the financial firm has predicted a harsh drop for one Bitcoin metric, forecasting a potential decline of the Bitcoin Network Hash Rate by 20% leading up to the Bitcoin halving in April 2024.

JPMorgan Expects Bitcoin Hash Rate To Drop

In the report, JPMorgan stated that the Bitcoin mining industry is at a crucible stage leading all the way to the Bitcoin halving in April 2024 and beyond. This is because the approval of a Spot BTC exchange-traded fund (ETF) could spark a rally against the backdrop of record hash rates and the impending block reward halving that threatens the industry’s revenues and profitability.

The report highlighted that the total four-year block reward opportunity is estimated at $20 billion, due to the current price of Bitcoin (BTC), which is 72% lower than its all-time high in 2021. This figure represents a significant drop from its peak of $73 billion in April 2021 and has fluctuated around $14 billion and $25 billion since the past year.

As such, the financial firm expects the Bitcoin mining sector to see the predicted 20% hash rate drop at the next Bitcoin halving in April 2024.

“We estimate as much as 80 EH/s (or 20% of the network hash rate) could be removed at the next halving (April ‘24) as less-efficient hardware is decommissioned,” the report reads.

Bitcoin halving is an event that aims to control inflation and it involves the reduction of Bitcoin miners’ rewards by half, and it takes place roughly every four years after miners solve 210,000 blocks. 

Analysts Reginald Smith and Charles Pearce noted in the report that the bank favors mining operators that can offer the best relative value in light of the existing hash rate, operational efficiency, power contracts, and more.

JPMorgan chose Bitcoin mining company CleanSpark (CLSK) as its top pick among several companies listed by the firm, highlighting that the mining company offers the best balance of scale, growth potential, power costs, and relative value.

In addition, the firm highlighted the significance of other mining firms it listed. These include Marathon Digital (MARA), Riot platforms (RIOT), and Cipher mining (CIFR).

According to the firm, Marathon Digital is the largest mining operator, with the highest energy costs and lowest margins. Meanwhile, Riot has lower energy costs and liquidity, but Cipher has the lowest power costs with limited growth.

The firm also included an outweight rating table and price targets of the mining operators in the report.

The high cost of mining and the removal of inefficient hardware have been seen as some of the factors that tend to affect the Bitcoin mining industry.

Large amounts of electricity are needed for mining, and at first, this makes it too expensive for miners to continue their operation. Nevertheless, many also tend to come back whenever the next bullish cycle drives Bitcoin’s price to unprecedented levels.

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Cardano is one of the most actively developed blockchains with an ambitious roadmap. Its native ADA token has seen immense growth since launching in 2017. This article explores what’s next for Cardano prices.

What is Cardano (ADA)?

Cardano is an open-source proof-of-stake blockchain network founded by Ethereum co-founder Charles Hoskinson in 2015. It aims to provide fast, secure, and scalable blockchain transactions through leading research and development.

The Cardano blockchain is divided into layers handling different functions:

Cardano Settlement Layer (CSL) handles peer-to-peer transactions using the native ADA cryptocurrency.
Cardano Control Layer (CCL) runs smart contracts allowing decentralized apps and protocols.

Some key aspects of Cardano include:

Proof-of-stake consensus

Cardano uses an Ouroboros PoS algorithm that is less energy intensive than PoW blockchains.

Research-driven approach

Cardano takes a science and philosophy-based approach for robust protocols.

Multi-phase roadmap

Cardano is being developed systematically in stages as part of a long-term strategy.

Governance model

ADA holders can vote on Cardano Improvement Proposals to determine future upgrades.

Significant capabilities

Cardano aims to rival Ethereum as the leading smart contract platform once development completes.

Due to its organized development path, Cardano proponents believe it can achieve the vision of becoming the most advanced blockchain.

Factors Influencing Cardano’s Price

Several core factors impact Cardano prices and market outlook:

Cryptocurrency Market Trends

Like most altcoins, Cardano’s price depends significantly on the performance of top cryptos Bitcoin and Ethereum. Rising crypto markets lift ADA. Bullish Cardano news also can have an impact. 

Project Roadmap Progress

Cardano hitting major roadmap milestones like launching smart contracts demonstrates real-world viability and boosts ADA price.

Adoption By Developers

As developers build dApps, DeFi protocols and NFT projects on Cardano, utility grows along with demand for ADA tokens.

Staking Participation

Higher staking uptake increases locked ADA supply reducing selling pressure and potentially raising prices.

Competition

Interoperability blockchains like Polkadot and Cosmos or faster networks like Solana threaten to erode Cardano’s market share which impacts growth potential.

Upgrades and Governance

Smooth upgrades through community governance signals stability and reliability, instilling confidence in the network and ADA price.

Major Cardano Price History Developments

Cardano is still early in its developmental journey. Here are key highlights so far:

2017 – Shelley Era Begins

ADA tokens were first made available in early 2017, trading around $0.02 during the initial months. As the crypto market surged, ADA hit an all-time high of $1.33 in January 2018 before declining with the broader market.

The Shelley phase of decentralization development began, with staking and community governance capabilities being built. This marked a major step towards realizing Cardano’s vision.

2018-2020 – Bear Market Consolidation

ADA faded from the spotlight during the 2018-2020 crypto bear market, with prices falling as low as $0.027 in March 2020. However, staking adoption grew steadily, reaching over 21 billion ADA staked by August 2020 and reducing supply pressure.

Despite price weakness, Cardano made major headway on technical improvements during this period away from the hype.

2021 – Explosive Growth Phase

As crypto markets returned to health in 2021, ADA went on a monumental run starting from $0.18 at beginning of the year and reaching an all-time high of $3.10 in September 2021 – a surge of over 15x within 8 months!

Several developments triggered this growth phase:

Launch of native tokens and smart contracts functionality, allowing DeFi and dApp development.
Listing on prominent exchanges like Coinbase increased investment access.
Investor confidence grew in Cardano’s methodology after meeting roadmap targets.
Founder Charles Hoskinson’s media interviews drove interest among retail investors.

This proved a breakout year for ADA establishing itself as a leading altcoin. Cardano ended 2021 at around $1.50.

2022 – Crypto Winter Survival

The 2022 crypto bear market was harsh on most altcoins including ADA, which fell to around $0.24 losing over 85% of its value from the peak.  However, Cardano maintained active development throughout 2022. Over 100 projects were building on Cardano by year end despite market conditions. This demonstrated strong ecosystem fundamentals.

Recent Cardano Price Analysis  

In 2023, ADA hasn’t fared much better, making a lower low at around $0.22. It is currently trading at around $0.24 per token but is at risk of losing support of a descending triangle pattern.

Short-Term Cardano Price Prediction For 2023

With less than 90 days left in 2023, Cardano has little hope for much higher prices, and investors should focus more on what happens if support is lost. Immediate short-term price predictions could even point to more downside, possibly falling as low $0.15 before the year is over.

Medium-Term Cardano Price Forecast For 2024-2025

Once ADA finds a bottom, which could go as deep as $0.15 in the new year, the cryptocurrency market could finally be poised for a rebound. If these two years are positive for the cryptocurrency market, Cardano could find itself – shockingly – as much as $20 per ADA according to the Golden Ratio 1.618 Fibonacci.

Long-Term Cardano Price Prediction For 2030 And Beyond

By 2030, Cardano intends to fulfill its goal of becoming the most developed blockchain platform. Assuming it achieves the vision, ADA has vast growth potential. If it maintains the long-term linear trajectory it is on, there are changes that Cardano can trade between $10 and $45 in the longer term.

The next decade promises to be transformational for blockchain technology. If Cardano can cement itself as a leader, its long-term growth could be exponential. Patience and persistence are key.

Conclusion: Cardano Price Prediction

Cardano has established itself as a leading development-focused blockchain with the goal of becoming the backbone infrastructure for decentralized finance one day. While market conditions remain challenging currently, long-term growth prospects appear bright for Cardano by 2025 and beyond. Hitting development milestones will be crucial for justifying significant price appreciation in the future.

Cardano Price Prediction FAQs

Let’s look at some common questions investors have about ADA price analysis:

What was Cardano’s lowest price?

ADA sank to as low as $0.017 in the early stages after launch in 2017. During the 2022 and 2023 bear market, it dropped to around $0.22 which is the recent low.

What was the highest price for Cardano?

Cardano’s all-time high price was $3.10 reached in September 2021 at the peak of the crypto bull run.

Is $10 possible for Cardano?

ADA reaching $10 is achievable if crypto adoption returns to rapid growth by 2025 and Cardano executes its ambitious roadmap. But $10+ seems unlikely in the near-term given current depressed market conditions.

Can Cardano crash to zero?

A complete crash to zero looks highly unlikely barring an existential catastrophe given Cardano’s strong fundamentals. But an extended crypto winter could potentially push it below $0.10 until markets recover.

Why is ADA so volatile?

As with most cryptocurrencies, speculation and changing market sentiments contribute to ADA’s volatility. As a top-10 token, it also experiences high trading activity and price swings.

When will Cardano’s price stabilize?

ADA volatility should stabilize significantly if/when Cardano sees massive adoption as a blockchain solution used by enterprises, institutions and governments. But markets will likely remain turbulent for foreseeable future.

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Data shows the Bitcoin drop below the $27,000 level has made most investors fearful for the first time this month.

Bitcoin Fear & Greed Index Is Pointing At “Fear” Right Now

The “fear and greed index” is an indicator that tells us about the general sentiment among investors in the Bitcoin and broader cryptocurrency market. Alternative created the metric, and according to the website, it’s based on these factors: volatility, trading volume, social media sentiment, market cap dominance, and Google Trends data.

The indicator uses a numeric scale from zero to hundred to represent the sentiment. When the index has a value greater than 54, it means that the average investor is greedy right now, while it being under 46 implies a fearful mentality is dominant.

The region between these two thresholds naturally signifies a neutral sentiment among the holders. Until today, the sector had been stuck inside this region since the last couple of days of September, as the investors had been split about the trajectory of Bitcoin.

The chart below shows that the market sentiment has worsened with the latest drop in the cryptocurrency’s price below the $27,000 level.

After this latest drop in sentiment, the fear and greed index has hit a value of 45, meaning that investor sentiment has just entered the fear region.

Historically, the market has tended to move in a way that’s opposite to what the majority of the investors believe. The likelihood of such a contrary move happening increases as this imbalance in the sentiment rises.

While the holders are leaning towards one side (fear), the imbalance is small, as the fear and greed index is barely inside the territory. As such, the probability of a rebound would be pretty high right now (at least based on the sentiment).

Besides the core sentiments discussed before, there are also two special zones, called “extreme fear” (at or below values of 25) and “extreme greed” (at or above values of 75).

These regions are where the cryptocurrency has often turned around in the past. Naturally, bottoms have occurred in the former zone, while tops have formed in the latter area.

If the Bitcoin fear and greed index continues declining in the coming days and reaches values near the extreme fear region, a bounce could become a real possibility.

For now, one sign pointing to the chances of a rebound may be that the large investors have been buying recently, as an analyst on X pointed out.

Since the start of October, Bitcoin investors holding between 100 and 1,000 coins have purchased a combined 20,000 BTC worth around $533.6 million at the current exchange rate.

BTC Price

At the time of writing, Bitcoin is trading at around $26,700, down almost 5% in the past week.

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The XRP price has had a rollercoaster growth trajectory which was mostly hindered by the US Securities and Exchange Commission (SEC) filing a lawsuit against Ripple. But a lot of the altcoin’s performances over the months have been rather predictable, and with its history, we can get an idea of what to expect for the XRP price this month.

October Not Looking Good For XRP Price

In a heat map of historical XRP price data generated by NewsBTC, we can see how the month of October has usually gone in the past. The heat map shows XRP’s performance over the last eight years and the figures for October are some of the worst historically.

As shown in the image below, the month of October has historically seen more losses than gains when it comes to the XRP price. In fact, out of the last eight years, only two years have seen October record a positive return for the XRP price.

In the first four years of the altcoin’s life, we can see that the month of October was characterized by losses. Then in the fifth year in 2019, XRP saw its first profitable October with a 14.84% increase. Then from there, there is an alternating trend recorded with one year being profitable and the next being filled with losses.

The year 2022 was no different, seeing 3.24% losses after the previous year saw October end with 16.71% gains. So if this holds, it could be that October 2023 would end on a good note. However, as the charts show, this month is already seeing XRP prices fall, so for it to finish strong, there would have to be a massive price reversal. Otherwise, October 2023 could stick to historical performance and end in the red.

October Is Not A Good Month

As shown in this report from Bitcoinist, taking an average of the XRP price performance in October over the years shows that it is not a good month for the altcoin. The chart shared in the report reveals that historically, October is the third-worst month for the cryptocurrency.

The only months that have seen worse performance than October are the months of February with slightly higher loss numbers. Meanwhile, June takes the crown for the month with the worst returns as the last 7 seven years have seen the month end with losses.

On the other hand, December presents as the best month for the XRP price. This is followed by April being the second, with May and March snagging fourth and fifth place, respectively. January, November, and September are also profitable months but to a much lesser degree.

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On-chain data shows Bitcoin has failed in its latest retest of a historically significant metric, a sign that a bearish trend might have taken over.

Bitcoin Has Been Rejected From The Short-Term Holder Cost Basis

As pointed out by an analyst in a post on X, BTC is currently facing resistance at the short-term holder’s realized price. The “realized price” here refers to the cost basis or acquisition price of the average investor in the Bitcoin market.

When the spot price of the cryptocurrency is below this level, it means that the investors as a whole are currently in a state of net loss. On the other hand, the asset being above this metric suggests that the overall market is holding some profits right now.

In the context of the current discussion, the realized price of the entire BTC sector isn’t of relevance, but of only a particular segment: the “short-term holders” (STHs).

The STHs are the investors who purchased their coins within the past 155 days. The members of this group are generally weak in their conviction, and thus, they can be quite reactive to changes in the market.

Now, here is a chart that shows the trend in the Bitcoin realized price specifically for these STHs over the past couple of years:

As displayed in the above graph, the Bitcoin short-term holder’s realized price is valued at about $27,800 right now. During its most recent attempt at recovery, BTC retested this line but ended up finding some major resistance at it.

The indicator actually has a lot of history of acting as both resistance and support for the spot price of the cryptocurrency. Generally, this line has helped the asset during bull rallies, while it has impeded it in bear markets.

From the chart, it’s visible that the asset’s price had found resistance at this mark and had remained under it throughout the bear market in 2022. With the rally that started in January of this year, though, the coin had finally managed to find a break.

The realized price of the STHs had then flipped towards being a support level, as it had propelled the asset during the retests in March and June. With the crash in August, however, Bitcoin once again slipped below the line and has been unable to climb back above it since.

Given the significance of the line, the latest retest of the indicator was quite important, so the fact that it ended in failure could be a worrying sign for the asset, as it may mean that a shift back towards a bearish trend might have occurred.

BTC Price

Retests like the one of the STH realized price can sometimes take a while to properly finish, but since Bitcoin has seen a steep decline towards the $26,700 level since the rejection, it may be confirmation that the asset was indeed rejected this time.

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