Bitcoin’s brief recovery above the $92,900 threshold may signal a key market shift, according to Glassnode. The STH Cost Basis is crucial, marking transitions between bullish and bearish phases. Current metrics suggest a mixed sentiment with high realized profits but significant profit-taking pressure, setting the stage for potential volatility ahead.
Bitcoin (BTC/USD) recently managed to breach the Short-Term Holder (STH) Cost Basis of $92,900, a significant threshold highlighted in a Glassnode report. This level is historically crucial, often acting as a divider between bullish and bearish market sentiments. The cryptocurrency spiked to $94,700 this week, spurred by optimism over potential tariff relief between the U.S. and China.
According to Glassnode, when Bitcoin trades above the STH Cost Basis, it indicates improved market sentiment and price trends. Conversely, trading below this mark typically signals that the market is facing distribution. “A sustained breach beyond this price point historically signifies the shift from bearish corrections to renewed bullish momentum,” the report stated. However, this recent reclaim is described as temporary, lacking confirmation of a definitive market regime shift yet.
Interestingly, the Percent Supply in Profit has climbed to 87.3%, a notable increase from 82.7%, indicating that a greater share of Bitcoin has changed hands during recent corrections. Additionally, the Short-Term Holder Profit/Loss Ratio (STH-P/L) has returned to neutral at 1.0, showing equilibrium between coins in profit and those at a loss, a level that historically poses as a resistance during recovery phases.
Other key indicators suggest the market is at a critical juncture. Realised profit has surged dramatically to $139.9 million per hour, which surpasses the long-term average of $120 million per hour, hinting that profit-taking pressure could be on the rise. Open interest in futures has also seen a 15.6% hike, along with negative funding rates, suggesting that many traders are adopting short positions as prices rally.
Looking forward, the potential for a short squeeze looms if the resistance level fails to hold. This comes on the heels of $1.54 billion in net inflows into U.S. spot Bitcoin ETFs on April 22, marking one of the largest inflow days on record. The striking disparity between Bitcoin and Ethereum (ETH/USD) ETF flows further signifies Bitcoin’s institutional dominance during the current rebound.
The market is clearly navigating through turbulent waters, and while the reclaim of $92,900 is a positive signal, the path ahead remains uncertain.
