The “emergency” demand for Bitcoin (BTC) at $20,000 seems to have forced the coins back into the hands of investors who care less about price, creating a new level of realized price.

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In the last week of OnChain Newsletter Glassnode’s UkuriaOC, published July 25, pointed to “extreme demand” in the $20,000 region, noting that at each psychological price level between $40,000 to $30,000 and $20,000, a new group of short-term holders (STH) is being created.

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A Glassode analyst noted that most of the supply that new STHs bought during this drawdown was not sold, although prices dropped significantly. This could be due to less price sensitive buyers or those who care more about Bitcoin fundamentals than investment returns, which is driving demand.

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From the end of April to June, the price of BTC fell by 55% from $40,000 to a low of $18,100. according at CoinGecko.

Glassnode wrote that this suggests that the newly minted STHs are price-insensitive buyers with more confidence in bitcoin, adding that their conversion from STH to a long-term holder (LTH) that has not sold for at least 155 days would help confirm this. .

“It would be constructive if these coins, held in STH at $40-50k, began to mature to LTH status in the coming weeks, which would help bolster that argument.”

In this current bear market, confirmed LTHs have recorded almost 400 consecutive days of yearly returns that exceed 30-day returns.

This is almost the same duration as LTH during the 2018 bear market. Glassnode wrote that this suggests that losses are fixed by LTH, which, if the previous argument is correct, means that new buyers are less price sensitive than the cohort that sold, meaning they could be the newest LTH group.

Another note in the report is that the “unprecedented forced sale” by crypto companies amid massive liquidations and bankruptcies has set the stage for relief.

The battle between cryptocurrency bulls and bears shows hope for the future

The report concludes that while “the worst of the capitulation may be behind us,” BTC may remain in this low range for some time as the underlying value for new coin buyers has only deviated below the sale price for about 17 consecutive days. Previous bearish cycles have had small discrepancies between 248 and 575 days.

BTC has retreated 3.1% in the last 24 hours and is trading at $21,146 at the time of writing.