Analyst: BTC may face resistance at $65,000

Author: Omkar Godbole, Coindes; Compiler: Deng Tong, Golden Finance

• Short-term holders’ wallets are incurring losses and may be liquidated near the $65,000 breakeven level.

• Long-term holder wallets with an average cost of less than $20,000 are incentivized to hold or increase their cryptocurrency reserves.

As Bitcoin (BTC) looks to recover from its July losses, new challenges loom, with on-chain data suggesting a potential resistance level of $65,000.

BTC by market capitalization is trading up nearly 1% at $63,200 as of this writing, looking to regain some stability after a 7% drop in late June. June’s drop reversed a rally seen in May and was driven primarily by miner selling and concerns that ETF inflows represented non-directional arbitrage bets rather than outright bullish bets.

Notably, the price drop has taken the price well below the widely tracked cost basis of short-term Bitcoin holders, or wallets storing for 155 days or less. According to data source LookIntoBitcoin, the total cost basis for short-term holders is $65,000 as of this writing. The on-chain analytics firm considers realized price as the total cost basis, reflecting the average price at which a cryptocurrency was last spent on-chain.

In other words, short-term holders are now facing losses or holding losing positions and may try to exit the market at a loss or breakeven, which could increase selling pressure around $65,000.

"Bitcoin's price is below the total cost basis of short-term holders for the first time since August 2023. In the short term, we expect some resistance around $65,000 as short-term market speculators may look to exit their positions at 'breakeven' levels," Blockware Intelligence analysts said in the latest edition of their newsletter.

The analysis added: “Last summer, when BTC lost its STH RP (realized price) support level, the price traded sideways for another two months before finally breaking out again.”

The realized price, or average cost basis, of short-term Bitcoin holders. (LookIntoBitcoin)

Meanwhile, long-term wallet holders have a strong incentive to maintain or increase their cryptocurrency stash, according to LookIntoBitcoin, as their average cost is less than $20,000. Yes, you read that correctly, their average cost is nearly 70% lower than BTC’s prevailing market price.

Additionally, the 15% pullback in Bitcoin’s price from its all-time high of over $73,500 in March may seem large to traditional market investors, but it’s a normal bull market correction for long-term crypto holders.

“BTC has seen 10 declines of 20% or more during the 2017 cycle. This is a normal, healthy bull market correction. Bitcoin’s price volatility shakes out weak hands and provides opportunities for strategic capital deployment for those with a longer time horizon,” Blockware said.