- BTC’s STH MVRV seemed to be at an inflection point that could fuel or dump BTC
- Options traders increased hedging activity ahead of Trump’s inauguration
Bitcoin [BTC] is at a crossroads ahead of Donald Trump’s presidential inauguration on 20 January. That’s not all though, as a key valuation indicator, STH (short-term holders) MVRV, has retreated to a pivotal point too.
Is another ‘Trump pump’ likely?
At press time, the STH’s realized price was valued at $86k. Factoring the STH MVRV level, this could be a bullish trigger for BTC, according to CryptoQuant analyst Axel Adler. Adler noted,
“Currently, the STH Realized Price stands at $86.8K. If demand persists until Trump’s inauguration, the STH RP could rise to $90K. Should the president fulfill even some of the promises made to voters in the early days of his term, this could serve as a strong bullish trigger.”
Source: CryptoQuant
The chart attached revealed that the STH MVRV bounced at the mean level in January 2024. Afterwards, BTC saw an 88% pump to $72k. This also coincided with the approval of the U.S Spot BTC ETFs, suggesting that a repeat could be likely if Trump makes any bullish announcements for the sector.
On the contrary, a drop below the mean level for STH MVRV has historically indicated a prolonged downtrend or price consolidation for BTC. This could happen if BTC’s price drops below the STH cost basis, which was at $88k at the time of writing, according to Glassnode.
The analytics firm stated,
“$BTC price is now around 7% above the STH cost-basis of $88,135. If the price stabilizes below this level, it can signal waning sentiment among new investors – which is often a turning point in market trends.”
Source: Glassnode
In short, if BTC defends $88k before or after Trump’s inauguration, a strong rebound could be imminent. However, a drop below $88k could trigger a panic sell-off by the STH cohort, which could drag the cryptocurrency even lower.
On the Options market, traders have been pricing negative to slightly bullish outlooks before and after the inauguration. This was illustrated by the 24-hour change in the 25RR (25-Delta Risk Reversal).
The indicator was negative for 17th and 24th January Option expiries, underscoring increasing hedging activity or a premium for puts options (bearish bets to cover downside risks).
Source: Amberdata
For the 31 January expiry, the 25RR was slightly positive at 0.31, indicating a slight premium for calls (bullish bets). Simply put, Options traders are expecting wild swings and potential drops before the event and some stabilization afterwards.
