Recent fluctuations in Bitcoin's price have raised concerns among investors, yet short-term buyers continue to increase their holdings.
Why Are Short-Term Investors Acquiring More?
In the past day, Bitcoin's value saw a 1.3% decrease, currently stabilizing at approximately $113,600. This dip has sparked anxiety in the investment community about the potential for further declines. Contrarily, short-term investors are capitalizing on the lower prices, suggesting optimism for a near-term price rebound. Recent data indicates an increase in Bitcoin holdings by investors active for less than 155 days, rising from 2,460,514 BTC to 2,503,798 BTC. This increase corresponds with the period when Bitcoin's price dropped from $123,000 to $112,000, indicating a surge in buying activity among this group. Similar trends were observed in June, when such price dips attracted increased purchases.
Why Continue Buying at a Loss?
Despite the recent price downturn, short-term investors persist in accumulating Bitcoin, even incurring losses. The Short-Term Holder Spent Output Profit Ratio (SOPR) touched its lowest level in a month on August 18, indicating sales at a loss during this period. A SOPR below 1 generally suggests that sellers are experiencing losses. Historically, such conditions have preceded upward corrections in Bitcoin’s market value. The persistence in buying despite losses suggests confidence rather than panic selling among short-term investors.
Is Recovery Possible Without Key Support?
Although Bitcoin faces downward pressure, signs of recovery are appearing as it stabilizes around $113,600. Critical support lies at $111,900, and maintaining this level is considered essential for rebounding possibilities. Furthermore, the price still meets resistance at $114,600, with additional hurdles at $116,715 and $118,197. Breaking through these levels, particularly surpassing $118,200, could signify a positive shift in market dynamics. Past patterns show that aggressive purchases by short-term investors, along with SOPR shifts, often coincide with significant price bottoms, frequently resulting in $10,000 price increases within a few days.
Should this pattern repeat, Bitcoin might experience a new upward trend; however, a fall below $111,900 may alter these positive projections.
