Bitcoin has seen a modest recovery after dipping below the $100,000 mark earlier today. At the time of writing, BTC is trading just above $101,000, following a 3.7% decline in the last 24 hours.
This recent movement appears to have not only instilled hope in investors but has also caught the attention of analysts now closely monitoring on-chain data and short-term holder behavior to understand the asset’s next potential move and the critical levels to watch.
Key Support level for Bitcoin
Yonsei Dent, a contributor to CryptoQuant’s QuickTake Platform, has highlighted key metrics indicating that short-term holders (STH) may play a pivotal role in defining Bitcoin’s immediate support levels.
In his latest analysis, Dent identified $89,900 as a critical support level for holders who have held BTC for one week to six months. He noted that most short-term holders remain in profit, which reduces the likelihood of a sudden wave of selling pressure.
However, Dent also acknowledged that holders in the three-to-six-month range are at a loss, though their limited market share—9.4% of the Realized Cap—minimizes their potential to disrupt broader market dynamics.
Dent’s findings also indicate that the $89,900 level serves as both a technical and on-chain support zone. As market volatility continues to compress, this support level gains importance. Any breach or bounce from this range is likely to draw significant attention from traders and analysts.
The data suggests that short-term pullbacks may not trigger widespread panic selling, keeping the market relatively stable around this price mark.
With Volatility Highly Compressed, Where is the Key STH Support Level?
“This suggests that $89.9k could be a stable support zone, even amid short-term pullbacks.” – By @Yonsei_dent
Link https://t.co/4ayRJBQlWe pic.twitter.com/iNlBMriS78
— CryptoQuant.com (@cryptoquant_com) January 27, 2025
Major Players Refuse To Sell Their BTC Holdings
Meanwhile, another CryptoQuant analyst, Grizzly, provided additional insight into the behavior of long-term and short-term holders. According to Grizzly, the SOPR ratio—measuring the profit ratio between long-term and short-term holders—has not risen as sharply during the current bull run compared to previous cycles.
This may indicate a shift in market behavior as Bitcoin matures. Grizzly pointed out that as more cycles occur, investors become less inclined to engage in speculative trading. Instead, they appear to adopt a more measured approach, treating Bitcoin as a long-term asset rather than a quick profit opportunity.
Furthermore, Grizzly noted that institutional participation in Bitcoin has fundamentally “altered” market dynamics. With more capital flowing into Bitcoin portfolios rather than exchanges, there is a visible decrease in immediate selling pressure.
This trend, coupled with the maturing investor base, suggests that Bitcoin could enter a new cycle characterized by longer holding periods and fewer speculative fluctuations.
Featured image created with DALL-E, Chart from TradingView
