Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
Bitcoin (BTC) has surpassed the $120,000 mark for the first time since August, as onchain data suggests a potential entry into a new accumulation phase. This rally is attributed to a significant cooling in selling pressure from long-term holders and a stabilization among short-term holders, signaling a shift in market dynamics.
Long-Term Holders Show Reduced Selling Pressure
Data from Glassnode indicates that the Short-Term Holder Realized Value (RVT) ratio has been consistently compressing since May, reflecting a decrease in speculative excess. Historically, a contraction in RVT levels towards a “full market detox” zone suggests that short-term traders are realizing fewer profits relative to overall network activity.
This trend, if sustained, could establish a foundation for renewed accumulation as investors position themselves for a clearer market direction. Furthermore, Glassnode data shows the Long-Term Holders Net Position Change (3D) metric has moved into neutral territory after months of distribution, suggesting a tapering off of profit-taking.
Short-Term Holders Absorb Losses, Stabilize Market
Complementing the long-term trends, short-term investor behavior also shows signs of stabilization. According to CryptoQuant, short-term holders (STHs) experienced a period of stress in September, with the STH-SOPR (Spent Output Profit Ratio) dropping to 0.992, indicating speculative wallets were realizing losses.
However, the metric rebounded slightly last week to 0.995, signaling early market stabilization despite remaining below August’s 0.998. Historically, such resets can either lead to extended corrective phases or a “healthy reset” where selling pressure is quickly absorbed by the market.
Potential for a Decisive Breakout
The combined effect of waning long-term holder distribution and the unwinding of short-term excess suggests the market may be preparing for a decisive breakout. Analysis points to Bitcoin forming a structural base in the $115,000 to $120,000 range, reminiscent of consolidation phases seen earlier in the year.
With BTC comfortably consolidating above $115,000, the recovery in STH-SOPR could be a marker of market resilience. The $120,000 level is now identified as a key threshold to watch for further upward momentum, potentially driven by exchange-traded funds (ETFs) and new inflows.
Key Takeaways
Bitcoin’s recent surge past $120,000 is underpinned by onchain data indicating a significant shift in market dynamics. Reduced selling from long-term holders and stabilizing short-term investor behavior suggest the cryptocurrency could be entering a new accumulation phase, setting the stage for potential future gains.
