The Bitcoin market is currently in a precarious state as the supply from short-term holders has significantly decreased this year. While Bitcoin’s price is gradually recovering, the STH NUPL metric nears a balance point, indicating the potential for increased sell pressure from short-term investors.
A key indicator of this trend is the Net Unrealized Profit Loss (NUPL) metric for short-term holders (STH). When the STH NUPL values are above 0, these holders can profit by selling their coins, indicating a market price higher than their acquisition cost. Currently, the STH NUPL values are negative, suggesting unrealized losses for short-term holders.
As the Bitcoin price rises and the STH NUPL metric increases, the market may experience selling pressure. This situation is further aggravated by the fact that short-term Bitcoin holders have reduced their holdings by almost a million BTC since April. In contrast, long-term holders added over a million BTC in the same period, resulting in an all-time high in LTH supply.