Bitcoin Targets $99K: 3 Reasons Why BTC Holders Are Opting to Hold

As Bitcoin soared to $126,000 three months ago, it encountered significant selling pressure, dipping to a low of nearly $80,000. This decline placed considerable strain on short-term holders, resulting in expanded unrealized losses. Data from Checkonchain indicated that the unrealized losses for Short-Term Holders (STHs) reached a staggering $110 billion in November.

Key Takeaways

Bitcoin price recently rebounded to around $97,000, reducing unrealized losses for short-term holders.
A significant drop in short-term holder sell-side risk indicates potential stability in the market.
Short-term holders are remaining patient, driven by a lack of motivation to sell.
Bitcoin has shown improved momentum, with the potential to reach $99,000 if it surpasses critical EMA resistance levels.

Bitcoin [BTC]

Bitcoin unrealized loss

Source: Checkonchain

In recent weeks, the landscape has changed significantly. Bitcoin saw a sharp rebound, rising to about $97,000. This increase helped lower short-term holders' unrealized losses to approximately $65 billion, alleviating some of the stress from this group.

Short-Term Holders Exit Extreme Discomfort

According to CryptoQuant analyst Darkfost, Bitcoin's short-term holders have finally moved out of a state of extreme discomfort. Previously, this cohort faced heightened anxiety, as the average losses for STHs surpassed 10% during the capitulation phase earlier in the cycle.

btc sth averaged upl

Source: CryptoQuant

Now, with Bitcoin trading just shy of $100,000, short-term holders have average losses of approximately 6.4%. While they are still at a loss, the easing pressure has reduced the chances of panic-selling among this group.

In fact, the sell-side risk from short-term holders has drastically decreased, with the indicator dropping to 0.000875—close to historical lows, as reported by Checkonchain.

Bitcoin STH sell side risk

Source: Checkonchain

Such indicators suggest that most selling from short-term holders has already taken place, leaving the remaining sellers feeling exhausted. However, this does not ensure an immediate price increase; it simply implies that any new demand could more easily influence the price upward.

Why Are Short-Term Holders Staying on the Sidelines?

Despite Bitcoin's recovery, short-term holders have not rushed to sell. This group lacks strong motivation to do so. Many weaker holders have already sold during previous downturns, which has lessened the need for ongoing loss realization.

Bitcoin STH SOPR

Source: Checkonchain

Data from Checkonchain shows that the market is moving away from forced selling. Concurrently, the Short-Term Holder SOPR increased, rising from 0.94 to 1.0 at the time of writing. This increase indicates that recent losses have been absorbed, suggesting a return to stability and thereby increasing the likelihood of ongoing recovery.

With limited profits to be gained and previous losses already sustained, short-term holders appear to be more inclined to retain their positions.

Is There Hope for BTC?

Bitcoin previously attempted a breakout but faced resistance around $97,939, prompting a slight pullback. It has since consolidated near $95,000, with $94,000 providing near-term support.

BTC EMA & OM

Source: TradingView

As of now, Bitcoin (BTC) is valued at $95,147. This represents a 0.5% decrease over the day but a 4.93% increase over the week. Despite the pullback, momentum appears to be improving. The Chande Momentum Oscillator has risen from 16 to 52, indicating a strengthening upward momentum.

Furthermore, Bitcoin has moved above its 20-day and 50-day Exponential Moving Averages (EMAs). Currently, it is testing the 100-day EMA, located near $95,942. A sustained rise above this level could confirm bullish control and facilitate a move towards the 200-day EMA at $99,423. Conversely, a failure at the 100-day EMA could draw Bitcoin back toward the support zone around $92,388.