Bitcoin STH SOPR Breaks Above 1 For First Time Since December
14 Abril 2022 - 2:00PM
NEWSBTC
On-chain data shows the Bitcoin short-term holder SOPR has broken
above one for the first time since December 2021. Bitcoin
Short-Term Holders Return To Profit Once Again As pointed out by an
analyst in a CryptoQuant post, the BTC STH SOPR has once more
broken past the “one” barrier. The “Spent Output Profit Ratio” (or
SOPR in short) is a Bitcoin indicator that tells us whether coins
selling right now are selling at a profit or a loss. The metric
works by looking at the price history of each coin being sold on
the chain to see what price it last moved at. If the last price was
less than the current one, then the coin has been sold at a profit.
Similarly, a loss is when the current price is lesser. When the
value of the Bitcoin SOPR is less than one, it means investors are,
on an average, selling at a loss at the moment. On the other hand,
ratio values above one imply that the overall market is realizing a
profit currently. Related Reading | Can The 600-Day MA Support
Line Push Bitcoin Again? A modified version of the indicator shows
the profit ratio for only those coins that were held for less than
155 days before being sold. Such coins belong to a cohort of
investors called the “short-term holders.” The below chart shows
the trend in the Bitcoin STH SOPR (30DMA) over the past year: The
indicator seems to have just crossed over the "one" mark recently |
Source: CryptoQuant As you can see in the above graph, the Bitcoin
STH SOPR has broken above one once again over the last few days.
This is the first time that short-term holders have been selling at
a profit since December of last year. The significance of the SOPR
equal to 1 line is that it acts as a break-even point. The mark has
acted as support for the price of the crypto in the past. Related
Reading | Bitcoin Mimics Textbook Market Sentiment Cycle, What
Happens When Confidence Returns? But also, because of it being a
break-even point, it has also acted as resistance before. Reaching
the mark psychologically feels like getting their money “back” to
investors who were in loss previously so they tend to sell around
this mark, hence leading to it becoming resistance. Just a month or
ago the metric retested the level, but it failed and rebounded back
down. It remains to be seen now whether this time the Bitcoin STH
SOPR will hold above one or not. BTC Price At the time of writing,
Bitcoin’s price trades around $41.2k, down 5% in the past week.
BTC's price shows some recovery | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com,
CryptoQuant.com
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