Bitcoin (BTC) broke through the psychological barrier at $90,000 on November 12. That day, it transaction at a new record high of $93,265. However, as of this writing, the king coin is trading at $87,757, having lost 6% of its value in the past two days.
On-chain data shows that Bitcoin has seen a price drop due to increased profit-taking, mainly from short-term investors. As these short-term investors rush to secure profits, the possibility of Bitcoin reaching $90,000 in the short term becomes increasingly dim.
Short-Term Investors Are Market Movers
TinTucBitcoin’s analysis of Bitcoin’s Expenditure Lifespan Bands (SOAB) provides insights into investor behavior. This metric classifies Bitcoin Unspent Transaction Outputs (UTXO) by age and tracks their spending activity. Bitcoin UTXO represents the amount of coins a user has available to spend and is tracked on the network as inputs for new transactions.
BTC SOAB analysis provides insight into market sentiment and potential price moves. For example, increases in the younger age bands often indicate increased trading activity and profit-taking from short-term investors (those holding coins for less than 30 days). This has been happening in the BTC market since it first surpassed $90,000 on Wednesday.
According to CryptoQuant data, Bitcoin holders who only held coins for one day transferred 1.146 million BTC that day – the highest level in two months. Those with a holding period of one to seven days transferred 135,950 BTC, while those with a holding period of seven to 30 days transferred 32,021 BTC.
An increase in coin holder spending in less than a month typically signals that new, short-term investors are selling or moving their BTC. This points to increased profit-taking or reduced confidence by recent buyers, often creating selling pressure and contributing to short-term price volatility.
Long-Term Investors Hold the Market
Notably, long-term Bitcoin investors, those who hold coins for more than 12 months, have taken a different approach. While there are some coin fluctuations, they are still relatively minimal.
This suggests that since Bitcoin surpassed $90,000, price movements have been largely driven by short-term investors eager to lock in quick profits.
BTC Price Forecast: Things to Keep in Mind
Short-term investors hold a significant portion of Bitcoin’s circulating supply. So, a sustained spike in selling activity from this group of investors could put downward pressure on the currency. BTC could continue to fall further from $90,000 if the selling trend continues.
According to the Fibonacci Retracement tool indicators, if this situation occurs, BTC’s next price target is 83,792 USD. If this level fails to hold, BTC could slide below the $80,000 mark to trade at $76,356.
However, if short-term investors do not continue to sell, this negative forecast will be invalidated. This will increase the possibility of Bitcoin price surpassing $90,000. It could recover to a record level of $93,256 and could even aim for the $100,000 mark.