After rising to $20.9k, Bitcoin has seen a slight decline to lows of $20k today as a result of profit taking from short-term holders.
Bitcoin Short-Term Holder SOPR Has Raised Over the Last Two Days
As told by an analyst at Cryptoquant PostShort-term holders are using the latest price increase to take profits.
The relevant indicator here is the “Spent Output Profit Ratio” (SOPR), which tells us whether the average investor is selling bitcoin at a profit or at a loss.
When the value of this metric is greater than 1, it means that the overall market is currently making some profit. On the other hand, a value below the threshold suggests that the holders are selling at a loss as a whole.
Naturally, the SOPR value of exactly one suggests that investors are cracking down on their sell at the moment.
Now, there is a group in the bitcoin market called “short-term holders” (STH), which includes all investors who have been holding their coins for less than 155 days.
Here is a chart that specifically shows the trend in BTC SOPR for this holder group over the past few weeks:
The value of the metric seems to have spiked up in recent days | Source: CryptoQuant
As you can see in the graph above, the Bitcoin STH SOPR has risen above the 1 level in the past two days.
This rise coincides with the price of BTC, which finally surged after a prolonged sideways move around $19k. This shows that these investors are using this opportunity to earn some profit.
This kind of profit taking is generally bearish for the price of crypto, and as the chart demonstrates, there were three examples of such a trend during the past two weeks. As a result of all those gains from STH, prices came back down after a short-term rise.
This time too, BTC price declined from the $20.9k high to below $20.1k. before bringing some back to the current level.
At the time of writing, bitcoin price is floating around $20.5k, up 8% over the past seven days. In the past month, the value of crypto has increased by 7%.
Below is a chart showing the coin’s price trend over the past five days.
Looks like the value of the crypto has gone down over the last couple of days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com