Drop to bounce high: Bitcoin is still far from the "hot" take profit zone of STH

Bitcoin has gone through a slight adjustment in recent sessions but still holds above important support levels. According to analysts, the current fall is not necessarily a negative signal but could become a catalyst, paving the way for new capital to enter the market.

In particular, the short-term hodler group (STH) participating at the current price level is expected to play a crucial role as a driving force, creating momentum for Bitcoin towards higher price levels in the near future.

Bitcoin investors are still waiting for profits

The Cost Basis Model of STH is emerging as an important tool for explaining market behavior. This model identifies the average price at which new Bitcoin wallets enter, while applying standard deviation bands to delineate "overheated" areas – which often coincide with strong profit-taking phases when prices rise.

According to historical data, 127,000 USD is considered the first important resistance level. At this price level, local peaks often appear due to the early profit-taking wave of investors. Further on, the +2σ band around 144,000 USD is regarded as the "extreme euphoria zone," where market sentiment peaks and is likely to trigger deep corrections.

However, before reaching these selling pressure zones, the current market sentiment still shows significant room for price increase. This means that Bitcoin could continue its upward trend before facing stronger profit-taking pressure at higher levels.

The cost basis model of STH for Bitcoin | Source: GlassnodeThe net unrealized profit/loss index (NUPL) of STH provides an important layer of information to assess the growth dynamics of Bitcoin. In the past, when NUPL approached the threshold of 0.25, the market often entered a state of profit saturation, leading to corrective or accumulation phases. This is a sign of overly bullish sentiment, which can easily lead to price reversals.

Currently, NUPL has only reached 0.07, significantly lower than the saturation area. This reflects that the profits of short-term investors still have room to expand, and the market has not yet been pushed into the "overheated" zone. If prices continue to rise, this index could further reinforce the validity of the STH cost basis model, thereby enhancing expectations that Bitcoin still has the potential to conquer higher price levels before facing strong selling pressure.

Bitcoin STH NUPL | Source: Glassnode## Bitcoin price remains stable above the important support level

At the time of writing, Bitcoin is trading around 115,380 USD, continuing to hold above the key support zone of 115,000 USD. According to on-chain models, selling pressure from the STH group will only really increase when the price approaches 127,000 USD - the next major profit-taking level, higher than the previous historical peak of 124,474 USD.

To achieve this goal, Bitcoin needs broader consensus from the market. Geopolitical factors remain a barrier to investor sentiment, but new confidence from institutional capital flows and a recovery in liquidity could act as a catalyst. If BTC reclaims the support level of 117,261 USD and breaks through 120,000 USD, the prospect of a new price record in this cycle will be reinforced.

BTC price chart 1 day | Source: TradingViewConversely, in a negative scenario, losing the 115,000 USD mark could pull the price back to 112,526 USD or lower. Such a deep correction not only weakens the bullish argument but also exposes the fragility of the market to external fluctuations, forcing traders to maintain a cautious mindset in shaping strategies.

Annie