In the latest market development, Bitcoin (BTC) has experienced a 4% dip, causing unease among short-term holders. The cryptocurrency's price has fallen below the average purchase price paid by these investors, potentially leading to "panic" due to unrealized losses.

According to on-chain analyst James Check, known as "Checkmatey," these recent buyers are the most likely to be affected by the price drop. He described the situation as a "nuke" that opened the month of May, referring to Bitcoin briefly plummeting 8% below a key support level to $56,814.

The recent price decline has pushed Bitcoin to its lowest level since February, which is significant for short-term holders who have held the asset for less than 155 days and paid an average price of $59,600 per Bitcoin. Even with a slight recovery to $57,631 at the time of publication, these investors are still facing a 3% unrealized loss on average.

The sharp downturn in Bitcoin's price has led to the liquidation of $100.27 million in long positions over the past 24 hours, according to CoinGlass data. This price decline was driven by a broader crypto sell-off as market participants awaited the Federal Reserve's interest rate decision, which ultimately kept the current high interest rates unchanged.

While holding an unrealized loss is not ideal, Checkmatey suggests that short-term Bitcoin holders have experienced this before. He emphasizes that breaking the short-term holder cost basis is not the end of the world or the end of the bull market, and it has been recoverable in the past.

The On-Chain College, a crypto trading resource, also provided insights on the potential implications of this price movement. They noted that the short-term holder cost basis typically acts as support during bull periods and resistance during bear periods. However, they suggest that a "quick move" to $59,600, roughly 2.2% above Bitcoin's current price, would be a bullish signal, similar to a pattern observed in June 2023.

Additionally, the On-Chain College pointed out that when Bitcoin's price pulled back a few months later in August 2023, it stayed volatile below the short-term cost basis for some time. This suggests that a "sustained period" below the cost basis could also signal a bullish trend, according to their analysis.

In conclusion, the recent 4% dip in Bitcoin's price has sparked concern among short-term holders, who are facing unrealized losses. However, industry experts suggest that this is not an unprecedented situation and that the market may still have the potential for a bullish recovery, depending on how the price action unfolds in the coming days and weeks.