Bitcoin Short-Term Holder Profit-Taking Spikes, Will BTC Price Recover?

Share This Post

On-chain data shows Bitcoin short-term holder profit-taking has spiked, will this lead to a correction in the price of the crypto?

Bitcoin Short-Term Holder SOPR Has Surged Recently

As pointed out by an analyst in a CryptoQuant post, instances of the current trend have led to declines in the crypto’s price in the past. The relevant indicator here is the “Spent Output Profit Ratio” (SOPR), which tells us whether the average Bitcoin investor is selling their coins at a profit or at a loss right now.

When the value of this metric is greater than 1, it means the holders as a whole are realizing some profits on their selling currently. On the other hand, values below the threshold suggest the overall market is leaning towards loss realization at the moment. Naturally, the indicator being exactly equal to 1 implies the average holder is just breaking even on their distribution right now.

One of the two main segments of the BTC market is made up of the “short-term holders” (STHs), which is a cohort that includes all investors who acquired their coins within the last 155 days. The holders who have been sitting on their coins for more than this threshold amount are called “long-term holders” (LTHs).

Now, here is a chart that shows the trend in the Bitcoin SOPR specifically for the STHs:

Bitcoin Short-Term Holder SOPR

As displayed in the above graph, the Bitcoin STH SOPR (as well as its 7-day moving average) has surged and broken above 1 recently. This means that as the BTC rally has taken place, the STHs have come into profits and they are now selling to harvest these gains.

The chart also includes data for the 7-day triple exponential average (TRIX) of the STH SOPR. The TRIX is a momentum oscillator that shows the percentage change in a metric’s moving average after smoothening it exponentially three times (hence the name).

From the chart, it’s visible that during this bear market, whenever the STH SOPR 7-day TRIX has hit a positive top, the price of Bitcoin has noticed a local top formation as well and has subsequently gone down.

It looks like most recently, the 7-day TRIX of the STH SOPR has shot up again, and the metric seems to be curving inside now, potentially moving toward a top formation.

This pattern looks similar to the instances seen earlier in the bear market, which could suggest this Bitcoin rally may be heading toward the same fate as those previous ones. Though that would be only if the pattern does complete and the indicator makes the top.

The analyst has also posted the chart for the 2018-2019 bear market, to see how the current rally compares with that of April 2019.

Bitcoin 2018-2019 bear market

Interestingly, the rally of April 2019 only felt a short-term pullback from the first big spike in the indicator; it was only with the second spike that the price topped out. There have been some similarities between the current rally and that of April 2019 already, which may mean that the current one could also shrug off this first spike in the indicator and continue its momentum, just like the past rally.

BTC Price

At the time of writing, Bitcoin is trading around $22,900, up 5% in the last week.

Bitcoin Price Chart

Read Entire Article
spot_img

Related Posts

AI-based human gene editing breakthrough opens path to open-source cures to disease, slow aging

Founder and CEO of Biotechnology company Profluent Ali Madani revealed today that his team has successfully edited DNA in human cells using gene editors entirely designed by artificial intelligence

Crypto Expert Confirms Rotation Has Begun Post-Bitcoin Halving, Are Investors Moving Away From BTC?

A crypto analyst has shed light on the latest trends regarding the Bitcoin (BTC) dominance within the crypto market, suggesting a potential shift in investor sentiment as they diversify their

Ethereum Resurgence: TRON Founder Justin Sun Goes On 127,388 ETH Buying Spree

The second-largest crypto token by market cap, Ethereum (ETH), looks set to make a massive market recovery following recent buys suspected to be made by Tron’s founder, Justin Sun Sun’s

Exclusive ‘Epic Satoshi’ Auction Launches, Bids Already Double to 2 BTC

Coinex has launched the auction for the ‘epic satoshi’ from the fourth halving, originally mined by the mining pool Viabtc This event, marking Sat # 1,968,750,000,000,000, commenced

BlackRock Bitcoin ETF enters elite top 10 continuing a 70-day positive run of inflows

Quick Take According to Farside data, Bitcoin (BTC) exchange-traded funds (ETFs) saw a net inflow of $622 million on April 22 This marks back-to-back net inflows for the first time since April 11

Binance faces app removal in the Philippines over regulatory issues

The Philippines Securities and Exchange Commission (SEC) said it is working with Google and Apple to remove the Binance app from their app marketplaces for Filipino users, according to an April 23
- Advertisement -spot_img