What Critical Factors Will Determine Bitcoin Breaking the Downward Trend?

• As CryptoQuant analyst SignalQuant noted in a new report, it is likely to recover once its price exceeds the realized price (STHs) of short-term holders.
• BTC prices for short-term holders (STH) represent the average price of coins purchased over the last six months.
• An on-chain assessment of the coin’s network activity revealed a 5% increase in the daily number of new addresses created for trading in the past week.

Bitcoin price continues to move in certain ranges; What does it take for Bitcoin to break out of this range and start an upward move?

How Will Sentiment Around Bitcoin Improve?

According to a new report by CryptoQuant analyst SignalQuant, Bitcoin’s sentiment is likely to improve when its realized price (STHs) exceeds the price at which short-term holders bought.

The realized price for Bitcoin represents the average price at which all Bitcoins have been held throughout their lifetime. When the realized price is above the market price, it generally means market participants are overall profitable. Conversely, when the realized price is below the current price, coin holders are at a loss.

The realized price for short-term holders (STH) represents the average price of coins bought within the last six months. For long-term holders (LTH), it’s the average price of all coins that haven’t been moved within the last six months.

Data from Glassnode as of September 12th showed that the realized price for short-term holders of BTC was $27,975. According to SignalQuant, this price level acted as support for BTC back in January, but market trends have turned the same level into resistance.

The realized price for long-term holders was $22,400. BTC, with a current price of $26,270 at the time of writing, is trading between these two realized prices. According to SignalQuant:

“The price of BTC should remain above LTH realized price, and then it should break above STH realized price for the ‘short and long-term investor sentiment’ to really recover.”

This would indicate to investors that the bear market is over and that BTC’s price is likely to continue rising.

Continued Network Activity

While BTC’s price continues to face resistance around the $26,000 level, new demand keeps growing. On-chain evaluation of coin network activity has shown a 5% increase in the daily count of new addresses created for trading purposes in the past week.

In fact, on September 9th, the coin network saw the highest daily count of new addresses added in the last five years, totaling 717,331 new addresses. Additionally, IntoTheBlock data showed an 11% increase in daily active addresses during the same period.

Notably, there has been a significant increase in the daily number of shark and whale BTC transactions. According to IntoTheBlock, transactions with a value between $10,000 and $100,000 increased by 8% in the last 30 days.

Transactions with a value between $100,000 and $1 million from whale accounts also increased by 6% during the same period.