Bitcoin News Today: Bitcoin May Rise 25% Before Short-Term Holders Sell

Bitcoin has shown remarkable resilience near its all-time highs, with new on-chain data suggesting that there is still potential for the rally to continue. According to a July 17 analysis by CryptoQuant contributor Darkfost, the price of Bitcoin may still rise before encountering significant resistance. The analysis focuses on short-term holders, who are investors that have purchased Bitcoin in the past few months.

The Market Value to Realized Value (MVRV) ratio is a common metric used to track the behavior of these short-term holders. This ratio compares the market price of Bitcoin to the average price paid by these holders, providing insight into the unrealized profits they are sitting on. Historically, when the unrealized profit of these short-term holders reaches around 35%, it tends to trigger selling, leading to a short-term pullback. In past cycles, this threshold has aligned with an MVRV reading of approximately 1.35.

Currently, the MVRV ratio is closer to 1.15, indicating that short-term holders are not yet sitting on the kind of profits that have historically triggered major sell-offs. This suggests that Bitcoin has room to increase by an additional 20% to 25% before hitting that familiar tipping point. This shift can be attributed to the realized price, or the average price paid by short-term holders, recently crossing $100,000 for the first time. As of this week, it’s already above $102,000. This higher base makes it harder to reach the same level of unrealized profits as quickly as in previous cycles, giving Bitcoin more breathing room.

Bitcoin has recovered well after a brief dip following the latest U.S. inflation report. It dropped to around $116,000 but has since bounced back. At the time of writing, it’s trading at about $118,600, only 3.6% below its record high of around $123,000, set on July 14. Despite the price recovery, market activity has slowed, with daily trading volume down over 22%, indicating cooling momentum. In the derivatives market, data shows a 16.3% decline in volume and a slight fall in open interest, suggesting that traders are taking a more cautious approach in the near term.

From a technical standpoint, Bitcoin is consolidating just below the upper Bollinger Band, which is around $122,151. The relative strength index is at 69, just below the overbought threshold, indicating strong but not overheated momentum. A bullish bias is still supported by the majority of oscillators, such as the momentum and MACD indicators. Moving averages from the 10-day to 200-day timeframes are trending higher, reinforcing the view that BTC remains in a firmly bullish structure. Currently at around $116,464, the 10-day exponential moving average has supported recent declines and may act as a short-term floor if volatility returns.

A breakout above $120,000 might reopen the path toward retesting the $123,000 high if bulls recover volume support. On the downside, if $116,000 is not held, attention will turn to the mid-Bollinger range, which is approximately $112,000. Analysts predict that Bitcoin could rise another 25% before encountering significant resistance from short-term holders looking to take profits. This analysis is supported by the Market Value to Realized Value (MVRV) data, which indicates that there is still room for further upside before major selling pressure is exerted.

The recent price surge of Bitcoin is driven by longer-term institutional buyers, with a significant portion of Bitcoin being held by long-term investors. This suggests a limited supply and potential for price shifts. The increasing demand and bullish trends further validate the upward trajectory of Bitcoin. Analysts believe that this institutional buying will propel Bitcoin to new heights, potentially reaching $125,000 in the next month or two. This optimism is fueled by the belief that the surge is not just another speculative bubble but a sustained increase driven by fundamental factors. The limited supply and growing institutional interest are key drivers behind this prediction.

However, it is important to note that this forecast is based on current market conditions and analyst predictions. The actual price movement of Bitcoin will depend on various factors, including market sentiment, regulatory developments, and global economic conditions. Investors should be cautious and not invest more than they can afford to lose, as the cryptocurrency market is known for its volatility. In summary, Bitcoin's price could rise another 25% before short-term holders start taking profits, according to MVRV data. This upward movement is driven by institutional buying and limited supply, which could lead to a sustained increase in price. However, investors should be aware of the risks and not rely solely on analyst predictions.