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Short-term holder cost basis
The cost basis term is often used to describe the average entry price of investors into an asset. The short-term holder cost basis shows that the average entry of short-term Bitcoin holders is currently at $47,000.
Bitcoin price currently finding a delicate equilibrium between Short term holder cost basis at $47,000 and HODLer implied price at $40,000— Will Clemente (@WClementeIII) April 25, 2022
The bullish scenario would be a push above STH cost basis, while a bearish cross would be a sign of potential capitulation to come. pic.twitter.com/dud9aDVlY1
Whenever the short-term cost basis crosses the HODLer Implied Price, investors receive either bullish or bearish signals, depending on the direction of a cross. In the current case, if Bitcoin continues to drop further, the market will most likely dive deeper as selling pressure from short-term traders aggravates.
HODLer implied price
The second metric used by the Blockware analyst is the HODLer implied price, which is essentially the realized price of an asset divided by its liveliness, which is a metric that reflects the behavior of holders by measuring the number of liquidations which causes a metric's rise. In case coins remain dormant, the metric declines.
If the HODLer implied price metric crosses the short-term holder cost basis, the market should expect a rise in liquidation volume, which creates enormous pressure on the price. In case STH distances from the HODLer implied price, the market remains more stable.
While Bitcoin's move above $47,000 may become an extremely bullish event for the cryptocurrency market, we may still see enormous pressure on the price as some traders may decide to break even on their positions after a massive 20% dip.
At press time, Bitcoin is trading at $40,456 after tumbling down to $38,111, which caused extreme fear on the market.