Bitcoin has dropped to its lowest levels in a month, leaving traders wondering if their BTC price predictions will come to fruition. The combined cost price of various hodlers is now becoming a factor as concerns grow about a potential drop below $60,000.
BTC price floors are closely tied to hodlers’ cost bases
On June 14, Bitcoin (BTC) surprised many with a 3.5% decrease, pushing BTC/USD to $64,950 on Bitstamp. This move added to the losses for the week, bringing them to over 6.7%, and marking the lowest point for BTC since mid-May, according to data from Cointelegraph Markets Pro and TradingView.
“Bitcoin has just lost support at the 50-Day Moving Average,” noted Keith Alan, co-founder of trading resource Material Indicators, in a recent market update.
Although the $65,000 level managed to hold, some are now searching for potential areas where a short-term BTC price floor could be established, as new all-time highs seem increasingly out of reach.
Axel Adler Jr., a contributor to the onchain analytics platform CryptoQuant, believes that hodlers’ cost bases are about to face a new test in the market. These levels, also referred to as realized prices, represent the average purchase price for investors holding coins for various periods of time.
Of particular interest are short-term holders (STHs) who have been holding BTC for up to 155 days, as they represent the more speculative side of hodlers. Their cost basis has been a reliable support during bull markets since the beginning of 2023, as reported by Cointelegraph.
CryptoQuant data currently shows the realized price for STHs to be $62,200. Meanwhile, those holding for three to six months have a realized price of $55,500, and long-term holders have a cost basis of $24,300.
Adler commented on how the duration of the correction will depend on the market, but historically, similar situations have lasted from 65 to 371 days.
Bitcoin trader eyes potential “illiquid squeeze”
There are concerns that Bitcoin may drop back to $60,000 on the BTC/USD chart, and even that level may not provide enough support, as previously reported by Cointelegraph.
If this were to happen, experienced trader Peter Brandt warned that BTC could potentially drop as low as $48,000.
Traders are also monitoring shorter-term areas of interest based on exchange order book activity. Popular trader Skew recently pointed out an increase in bid liquidity around $62,000, noting a significant gap between bids and asks on the Binance exchange.
Data from monitoring resource CoinGlass shows a growing line of liquidity at $64,900 – just below the intraday lows – at the time of writing.
This article does not offer investment advice or recommendations. All investments and trading decisions involve risk, and readers should conduct their own research before making any decisions.