Short-Term Holders Take Profits as Bitcoin Consolidates Above $90K

• Bitcoin’s STH MVRV ratio fell from $98K and 1.35 to average levels, indicating profit-taking and a cooling market.
• Bitcoin holds support at $99K and $85K, while resistance at $110K remains critical for future price movement.
• Political factors and market demand will determine if consolidation leads to another upward move for Bitcoin.

The Bitcoin Short-Term Holder (STH) Market Value to Realized Value (MVRV) indicator has recently decreased from a high of $98,000 and a ratio of 1.35 to more typical levels, indicating that short-term holders have realized profits. An STH MVRV ratio above 1.30–1.35 often signals an overheated market, which can lead to sell-offs. 

Implications of STH MVRV Decline

Historically, after periods of overheating and subsequent profit-taking, if demand remains steady, the Bitcoin market tends to enter a sideways trend. Should the STH MVRV ratio fall below 1.0, it would indicate the formation of a local bottom, as short-term holders would be holding assets at a loss, potentially leading to reduced selling pressure.

In January 2024, a similar decline in the STH MVRV to average levels was sufficient for the market to generate a new upward impulse. Currently, market dynamics are heavily influenced by political decisions made by the Trump administration . If no negative triggers emerge, a new upward impulse could form. 

So far, the market has held above $89,000, with dips toward $90,000 consistently prompting holders to buy. This pattern reflects a consolidation phase driven by fear of missing out (FOMO), sustained by political statements from the administration that could trigger the next rally.

Key Support Levels and Investor Behavior

Axel Adler, a crypto analyst , has identified crucial support levels for Bitcoin. A recent analysis highlighted that Bitcoin has strong support at $99,000 and $85,000, with $110,000 acting as a significant resistance level. 

The asset faced multiple support levels at $90,000, and the lower longer shadow around $90,000 indicated buying at these levels. BTC resumed the upward movement and made a new all-time high of $109,588 last week. Post this move, the asset is consolidating between $100,000 and $107,000. 
The recent decline in the STH MVRV indicator to average levels suggests that the market has cooled from its overheated state. If demand remains intact and no adverse political developments occur, Bitcoin may experience a period of consolidation before potentially initiating a new upward movement.