Will The Bitcoin Short-Term Holder Breakeven Point Act As Resistance Again?
31 Julio 2022 - 02:00PM
NEWSBTC
On-chain data shows the Bitcoin short-term holder SOPR is
approaching the “breakeven” value, a point that has acted as
resistance for the crypto’s price in the past. Bitcoin Short-Term
Holder SOPR Surges Up And Approaches A Value Of “1” As pointed out
by an analyst in a CryptoQuant post, the selling pressure from the
short-term holders may see an increase if their SOPR keeps rising
up. The “Spent Output Profit Ratio” (or SOPR in short) is an
indicator that tells us whether the Bitcoin market as a whole is
currently selling at a profit or at a loss. The metric works by
going through the on-chain history of each coin being sold to see
what price it sold at before this. If the previous value of any
coin was less than the current price, than that coin moved at a
profit just now. While the last selling price being lesser than the
latest one would imply the sale of the coin lead to a realization
of loss. When the SOPR’s value is greater than one, it means the
overall market is selling at a profit at the moment. On the other
hand, values below the threshold suggest the average investor is
moving BTC at a loss. Now, the “short-term holders” (STHs) include
all Bitcoin investors who sell their coins after holding them for
less than 155 days. The below chart shows the trend in the SOPR
specifically for this cohort. The value of the metric seems to have
observed some rise in recent days | Source: CryptoQuant As you can
see in the above graph, the Bitcoin STH SOPR sunk down below “1” a
few months back, suggesting that these holders were selling at a
loss. During these last few months, the indicator has tried to
escape this zone twice, but both times it failed and the price also
simultaneously went down. The reason behind this trend is that the
“SOPR = 1” line represents the “breakeven” point for the market. As
the metric hits this level, investors who had previously been at
loss think they have now got their money “back” and thus sell their
coins here. This leads to a higher than usual selling pressure from
the STHs at this mark, which provides resistance to the price of
Bitcoin. Recently, the SOPR for this holder group surged up and is
now approaching the threshold once again. If past trend is anything
to go by, once it tests the value, BTC may see some downtrend this
time as well. BTC Price At the time of writing, Bitcoin’s price
floats around $23.7k, up 5% in the last seven days. Looks like the
price of the coin has been consolidating sideways during the last
few days | Source: BTCUSD on TradingView Featured image from Amjith
S on Unsplash.com, charts from TradingView.com, CryptoQuant.com
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