Bitcoin STH Profit-Taking Ramps Up As Price Breaks $74,000

On-chain data shows the Bitcoin short-term holders have responded to the latest price rally by participating in profit realization.

In a new post on X, on-chain analytics firm Glassnode has talked about the latest trend in the Realized Profit for the Bitcoin short-term holders. The Realized Profit here refers to an indicator that measures, as its name suggests, the total amount of profit being harvested by BTC investors through their transactions.

The metric works by going through the transfer history of each coin being moved on the network to see what price it was transacted at prior to this. If the previous selling price was less than the latest spot price for any token, then that particular coin’s current transaction is leading to the realization of some net gain.

The exact degree of profit involved in the move is naturally equal to the difference between the two prices. The Realized Profit adds up this difference for all profitable moves on the blockchain.

In the context of the current topic, the Realized Profit of only a segment of the market is of interest: the short-term holders (STHs). This group includes the BTC investors who purchased their coins within the past 155 days.

The STHs are generally considered to represent the fickle-minded side of the market, with its members tending to show some reaction whenever market volatility emerges. During the last few days, Bitcoin has seen a recovery surge beyond the $74,000 level and it would appear that the STHs have reacted to it as well.

As displayed in the above graph, the 12-hour moving average (MA) of the Bitcoin STH Realized Profit spiked to a value of $18.4 million per hour alongside the price rally. Since the profit-taking spree has arrived, the cryptocurrency’s surge has stalled. “Consistent with the pattern observed over February, where short-term holders continue to exhaust each rally at the +$70k level, absorbing momentum before any breakout can develop,” explained Glassnode.

It now remains to be seen whether Bitcoin can overcome the profit realization pressure from the STHs this time around or if the rally’s fate will be similar to other recent attempts at recovery.

In some other news, the crypto Fear & Greed Index has just returned to the fear territory, breaking a long streak of extreme fear in the market.

The uplift in sentiment suggests that the price rally has renewed some degree of optimism among traders, although with the index still at a value of 28, the market mood remains quite bearish.

Bitcoin broke above $75,000 during the price surge, but it has since returned to $74,300.