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The chain data shows that the short-term profit taking of Bitcoin holders has increased, will it lead to a correction of the price of cryptography?
Bitcoin Brief-Term Holder SOPR. It's been on the rise lately.
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.
Where the value of this measure exceeds 1, this means that the holders as a whole are currently making certain profits from their sale. On the other hand, values lower than the threshold suggest that the market as a whole is currently leaning towards the realization of losses. Of course, the fact that the indicator is exactly equal to 1 means that the average holder is only recovering in his expenses at the moment.
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. Holders who have been seated on their coins for more than this threshold amount are referred to as "long-term holders" (TLH).
Now here is a chart which shows the trend in Bitcoin SOPR specifically for STH:
The value of the metric seems to have risen in recent days | Source: CryptoQuantAs shown in the graph above, the Bitcoin STH SOPR (along with its 7-day moving average) has surged and shattered above 1 recently. It means that as the BTC rally unfolded, the STHS made profits and are now selling to reap those gains.
The graph also includes data for the ASD SOPR's 7-day triple exponential average (TRIX). The trix is a momentum oscillator which shows the percentage variation of the moving mean of a metric after having smoothed it exponentially three times (hence the name).
Of the graphics, it's only visible in this bearish market, Every time the sopr's seven-day threesome hits the charts, Bitcoin's price noticed a local higher education as well and then declined.
Doesn't look like a long time, The sopr's seven-day trio still exploded, and the metric appears to bend inward now, possibly moving towards higher education.
This model resembles the cases seen earlier in the bearish market, which might suggest this Bitcoin rally may be heading towards the same fate as those above. Although it would only be if the model does complete and the indicator does the upper.
The analyst also released the 2018-19 bear market graph, to see how the current recovery compares to the April 2019 recovery.
The trend in the STH SOPR 7-day TRIX in the 2018-2019 bear market | Source: CryptoQuantIt is interesting to note that the April 2019 rally experienced only a short-term decline from the first major peak of the indicator; Only with the second peak did the price get to its maximum. 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.
By now, Bitcoin is trading around $22,900, up 5% in the last week.
BTC consolidates | Source: BTCUSD on TradingView
