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From 232% to 13%: What Happened to Bitcoin’s Short-Term Gains?
Bitcoin has been trading above $118K, down just over 3% from its recently established all-time high. Despite this, its short-term holders are now seeing an unrealized profit of only 13%, according to on-chain data. This group, defined as wallets holding BTC between one and three months, often reflects broader sentiment among spot market participants aiming to optimize returns.
In the past, Bitcoin has traded near record highs with these types of holders enjoying significant gains. For instance, during previous cycles in 2012 and 2021, they saw average profits of 232% and 150%, respectively. However, in the current cycle, their gains peaked at a much lower 69% and have since dropped sharply.
With an average realized price around $104,000, many of these traders entered near the cycle’s top. As a result, their limited cushion makes them susceptible to market volatility. While present conditions do not yet hint at mass selling, should losses deepen, there’s a risk of capitulation from these short-term holders – an event that could exert additional pressure on the market.
Historically, such shakeouts have frequently preceded local bottoms, drawing in strategic buyers seeking to capitalize on temporary weakness. Meanwhile, institutional analysts anticipate a potential pause in Bitcoin’s rally.
Source: cryptopotato.com
