Will Bitcoin’s on-chain retest be successful in determining its market decision?

Bitcoin is approaching a crucial retest that could determine whether the current rally will continue or not, according to on-chain data. The key metric to watch is the “realized profit/loss ratio,” which measures the ratio between the profits and losses that Bitcoin investors are currently realizing throughout the network. Glassnode, an on-chain analytics firm, has reported that a successful retest of this metric would be positive for the asset’s price. The STHs (short-term holders), who have held onto their coins for less than 155 days, are the focus of the metric. The 7-day EMA Bitcoin STH realized profit/loss ratio has been above 1 during the past few months, indicating that profit realization has been the dominant force. However, the metric has been decreasing recently as the price has declined, approaching the 1 mark. This level has historically been significant for the market, serving as the point where STHs break even on their selling. If the retest is successful, it could lead to the continuation of the current rally. Otherwise, a bearish regime may return for Bitcoin. Currently, Bitcoin is trading around $26,000, up 1% in the last week.

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