Tough Month for Bitcoin: Glassnode Blames Short-Term Holders
Unearned losses now mount for short-term Bitcoin holders, and analysts raise the red flag as these holders start to become perceived as a risk to the market. As the recent Glassnode report explained, holders are carrying a large portion of the market weight of the pressure and risk causing a sell-off that would drive the market even further down.
Short-term Holders Face Unrealized Losses
The report on September 4, by Glassnode, showed that even though long-term Bitcoin holders were still in profit, the case was opposite for the short-term investors. With unrealized losses in their hands, this lot has more chances of selling if further declines are seen, analysts worry.
In comparison, the analytics firm likened current conditions to the choppy market of 2019 rather than a full-scale bear market, but still flagged a formidable risk. According to the report:
“Until the spot price reclaims the STH [Short-Term Holder] cost basis of $62.4k, there is an expectation for further market weakness.”
September: Historically Bitcoin’s Toughest Month
The issue of short-term holders comes as Bitcoin prepares to head into what is traditionally the toughest month. September has always been a tumultuous period for the digital currency, often producing the poorest returns of the year. This, put against increasing stress on the market coming from short-term holders, is seen as one of the major risks to further downward action in the market.
The possibility of US Federal Reserves’ interest rate cut only increases the uncertainty. According to some analysts, a deep rate cut could trigger a correction in Bitcoin with a drop in value up to 15-20%. That would bring it down to lows not seen since early 2024.
Probability of Market Fluctuation
Yet, many analysts are taking a very optimistic view of Bitcoin’s prospects for the longer term. Some see it falling to the $40,000-$50,000 range as a perfect buying opportunity, perhaps just ahead of the next big bull run. Fractal history would suggest that the $57,000 is likely to be an important support level.
Although the immediate outlook does look grim, many analysts are of the opinion that Bitcoin’s final quarter of 2024 may see a big rebound, with some speculating that a six-figure price target remains in play for the near future.
