Bitcoin continues to showcase high trading levels, remaining slightly below its historical high. At the same time, short-term holders are facing unexpectedly low profits.
Current Bitcoin Levels
At present, Bitcoin is trading above $118,000, which is 3% lower than its recently established all-time high.
Capitulation of Short-Term Holders
According to CryptoQuant, short-term Bitcoin holders, defined as those holding for one to three months, are seeing only 13% unrealized profit. In previous cycles, these holders experienced average profits of 232% in 2012 and 150% in 2021. In the current cycle, their maximum profits peaked at 69% before sharply declining. With an average realized price around $104,000, many of these traders bought close to the cycle's peak, making them particularly sensitive to market volatility.
Tactical Pause for Bitcoin
Matrixport states that the current setup may see Bitcoin's momentum stall due to impending market events, including earnings reports and Federal Reserve decisions. Historically, August and September have been weak months for Bitcoin, which could encourage traders to sell, resulting in temporary dips or trend changes.
The situation in the cryptocurrency market calls for caution, considering upcoming events and potential capitulation from short-term holders, which may add further pressure on Bitcoin.
