Bitcoin price falls below average cost, causing short-term holders to panic with a 4% dip

Bitcoin is currently trading below the average purchase price of short-term holders, causing potential panic due to unrealized losses, as stated by on-chain analyst James Check, also known as “Checkmatey.” This recent price drop has led to Bitcoin hitting its lowest level since February, which is significant for those who have held the cryptocurrency for less than 155 days, as they bought it at an average price of $59,600 per Bitcoin. Despite a slight recovery in price to $57,631 at the time of writing, short-term holders still face an average unrealized loss of 3%. The decline in Bitcoin’s price over the past 24 hours has resulted in the liquidation of $100.27 million in long positions. This sell-off occurred as market participants awaited the decision of the United States Federal Reserve on interest rates, which remained unchanged. Check acknowledged that while holding an unrealized loss is not ideal, it is recoverable, and breaking the short-term holder cost basis does not signify the end of the bull market. On-Chain College, a crypto trading resource, explained that the short-term holder cost basis typically acts as support during bull periods and resistance during bear periods. They also noted that a quick move to $59,600 would be considered bullish, based on a similar pattern observed in June 2023. Additionally, a sustained period below the cost basis could also indicate a bullish trend, as seen in August 2023. It is important to note that this article does not provide investment advice or recommendations, and readers should conduct their own research before making any financial decisions.