Bitcoin short-term holders hit 30-day profit streak as bull-market odds improve: CryptoQuant

Bitcoin short-term holders approached a full month in partial profit as analysis saw improving odds of an enduring bullish BTC price reversal.

Bitcoin (BTC) speculators have held onto profits for nearly a month in what new analysis sees as a key sign of market strength.

Key points:

Data from onchain analytics platform CryptoQuant shows that a subset of Bitcoin’s short-term holder (STH) cohort has been in profit since Aug. 16.

STH investors are wallets holding an unspent transaction output (UTXO) for less than six months. They correspond to newer buyers who are more sensitive to short-term price moves and volatility, adding or reducing exposure more readily than seasoned Bitcoin holders.

Since Aug. 16, the STH investor base has been split in terms of profits on their existing exposure. STH coins held in profit total $168.2 billion as of Tuesday, while $102.6 billion are held below acquisition price.

Bitcoin STH holdings in profit and loss. Source: CryptoQuant

To CryptoQuant, however, the ratio is less important than the fact that STHs have held onto at least some profit for 30 consecutive days.

“This is the first time STH have sat in profit territory for a sustained stretch since the market top. The last time was in January, but that episode didn’t last more than a week. In May, losses held by STH remained dominant,” it wrote in an accompanying blog post.

The phenomenon of lengthening uninterrupted periods of STH profitability is one that has characterized Bitcoin market recoveries throughout BTC price cycles. It was also observed at the end of Bitcoin’s 2022 bear market. CryptoQuant thus sees it as a prerequisite for the return of a long-term BTC price uptrend this cycle.

“The bear market trend only truly reverses once profits settle in for good STH and then push them to hold their positions and ride the upside,” it added.

Bitcoin STH holdings in profit and loss through year-end 2023. Source: CryptoQuant

The data echoes a similar stint of aggregate profitability currently being witnessed across the Bitcoin investor base as BTC/USD retains the majority of its 25% August upside.

Related: CLARITY Act vote meets Fed rate hike: Five things to know in Bitcoin this week

As Cointelegraph reported, the spent output profit ratio (SOPR), which tracks net profits or losses across all investors, passed its breakeven level of 1 on Aug. 19 and has narrowly held above it since. Last week, onchain analytics suite Checkonchain argued that STH profitability in particular was “starting to look more like those early bull-market recoveries.” 

STH profitability is currently being driven by entities holding between one and three months, CryptoQuant data shows, with that cohort having a cost basis (also known as realized price) at $63,372. The cost basis of the more mature end of the STH base — wallets holding for between three and six months — now sits at $73,190.

Bitcoin realized price by wallet age. Source: CryptoQuant

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