Bitcoin has achieved a significant milestone, climbing above $120,000 for the first time since August. This increase comes as selling pressure from long-term holders decreases and short-term investors stabilize. It suggests the onset of a new accumulation phase.

Key takeaways:

• Bitcoin has surpassed $120,000 as long-term selling pressure lessens.
• Short-term holders appear to be stabilizing, helping to steady the market.
• Neutral long-term holder flows may pave the way for a significant market breakout.

On-chain data from Glassnode indicates that the Short-Term Holder Realized Value (RVT) ratio has been on a downward trend since May, showcasing a less speculative environment. Historically, high RVT levels correlate with hot markets, while movements toward the ‘full market detox’ zone suggest that short-term traders are reaping fewer profits relative to network activity. If this trend persists, it could set the stage for renewed accumulation as investors brace for clearer market direction.

Bitcoin short-term holder realized value ratio. Source: Glassnode

On the supply front, it remains crucial to balance long-term holders’ positions against institutional inflows. After months of consistent selling, the Long-Term Holders Net Position Change metric has shifted toward neutrality.

This change implies that the aggressive profit-taking seen in recent months is subsiding, potentially allowing exchange-traded funds (ETFs) and new inflow trends to dominate short-term market momentum.

BTC LTH net position change. Source: Glassnode

If supply dynamics continue to cool, Bitcoin may be forming a strong foundation in the $115,000 to $120,000 range. This mirrors the consolidation seen in March and April, which was succeeded by a notable rally.

With long-term holdings decreasing and short-term pressures easing, analysis indicates the market could be gearing up for a critical breakout, making the $120,000 mark a key focal point.

Bitcoin four-hour chart. Source: Cointelegraph/TradingView

While the dynamics among long-term holders seem stable, short-term investor activities are also revealing crucial signals. According to CryptoQuant, short-term holders have recently faced stress, with the STH-SOPR dipping to 0.992 in September. This indicates a trend where speculative wallets consistently incur losses—often seen as weak hands exiting the market.

BTC short-term holder SOPR multiples. Source: CryptoQuant

However, this metric saw a slight rebound to 0.995 last week. Although it remains below August’s figure of 0.998, it does indicate early signs of stabilization.

Historically, this kind of reset can result in either prolonged loss realizations leading to corrective markets or a ‘healthy reset’ where selling pressure is absorbed quickly. With Bitcoin faring well above $115,000, the recovery in STH-SOPR may signal market resilience as a new bullish trend approaches.

This article does not offer investment advice. Every investment carries risks, and readers should perform their own research before making any decisions.