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Bitcoin's potential recovery may face resistance at $65K

The potential increase in Bitcoin's price could be limited if investors sell off their assets around the $65,000 mark to reduce their losses.

Wallets held by short-term investors are in the negative and might liquidate close to $65,000, which is their breakeven point.

Wallets for long-term holders are designed to retain or increase their coin stockpile since they typically cost less than $20,000.

As bitcoin (BTC) attempts to bounce back from its July loss, further difficulties are ahead, as on-chain data points to a probable resistance level of $65,000.

In an attempt to restore composure after finishing June with a 7% loss, the top cryptocurrency by market value was trading almost 1% higher at $63,200 at the time of writing.

May's rise was reversed in June, primarily because of miner selling and worries that inflows into ETFs were more likely to be non-directional arbitrage bets than outright positive wagers.

The decrease has prominently driven prices well below the extensively monitored aggregate cost base of short-term Bitcoin holders or wallets with a storage duration of 155 days or less.

According to the data site LookIntoBitcoin, the short-term holders' aggregate cost basis was $65,000 as of this writing.

The average price at which coins were last spent on-chain is reflected in the realized price, which on-chain analytics companies use as the aggregate cost base.

As stated differently, short-term investors are now facing losses or have negative holdings and may try to leave the market at a loss or break even, which might increase selling pressure by close to $65,000.

For the first time since August 2023, Bitcoin's price has dropped below the short-term holders' aggregate cost basis.

In their most recent newsletter, Blockware Intelligence researchers said short-term market speculators may attempt to sell their holdings at a 'breakeven' level.

Therefore, we could anticipate some resistance around the ~$65,000 level shortly.

"Last summer when BTC lost the STH RP [realized price] support level, price traded sideways for another two months before finally breaking out again," analysts added.

Conversely, long-term holders have a significant incentive to increase or preserve their coin holdings since, according to LookIntoBitcoin, their average cost is less than $20,000.

That's correct; their average cost basis is about 70% lower than the current market price of Bitcoin.

In addition, a long-term cryptocurrency holder may see Bitcoin's 15% price decline from its all-time high of nearly $73,500 in March as a typical bull market correction despite its significance to a conventional market investor.

"During the 2017 cycle BTC had 10 drawdowns of 20% or more. This is a normal, healthy, bull market correction. Bitcoin's price volatility shakes out weak hands and provides opportunities for strategic capital deployment to those with a longer time horizon," Blockware said.