Data Shows Bitcoin Short-Term Holders Realizing Significant Losses
16 Diciembre 2021 - 1:00PM
NEWSBTC
On-chain data shows that Bitcoin short-term holders have now
started to realize significant losses. This could prove to be a
bearish signal for the crypto. Bitcoin Short-Term Holders Are
Taking Significant Losses As pointed out by an analyst in a
CryptoQuant post, the BTC market is now looking at significant
losses being realized. This trend may be reminiscent of the May
2021 crash. The relevant indicator here is the Spent Output Profit
Ratio (SOPR), which is an on-chain metric. The SOPR measures the
profit ratio of the overall market to check whether investors are,
on an average, in profit or loss. The indicator works by looking at
the price each coin on the chain was bought at and comparing it
with the selling price. When the value of the SOPR is above 1, it
means coins during the period sold at a profit. On the other hand,
values below 1 suggest holders were selling at a loss. Also,
naturally, when the indicator’s value is exactly equal to one, the
investors were, on average, breaking even for the specific
timescale. A modified version of the metric is the Short-Term
Holder SOPR (STH-SOPR), which shows the SOPR for coins that were
held for less than 155 days. Related Reading | Twin Peaks:
Comparing The Two 2021 Bitcoin Tops Now, here is a chart that
highlights the trend in the Bitcoin STH-SOPR over the past few
years: Looks like the value of the indicator has gone down recently
| Source: CryptoQuant As you can see in the above graph, the
STH-SOPR has decreased in value recently, and the metric is now
below one. This implies that these short-term holders have now
started to realize their losses as the price of Bitcoin continues
to decline. Related Reading | Bitcoin, Ether Spike After Fed
Announce No Change To Interest Rates The analyst in the post thinks
this trend may be similar to that seen in the aftermath of the May
crash. And so, the coin may continue to range sideways for a while,
just like then, before observing some uptrend. BTC Price At the
time of writing, Bitcoin’s price floats around $49k, down 0.5% in
the last seven days. Over the past thirty days, the crypto has lost
20% in value. The below chart shows the trend in the price of BTC
over the last five days. BTC's price has again continued its
sideways trend in the past few days | Source: BTCUSD on TradingView
Bitcoin has been in consolidation for a while now as the price
shows no signs of recovery. At the moment, it’s unclear when this
sideways movement may end, but if the STH-SOPR is anything to go
by, this trend may last a while longer, just like in May. Featured
image from Unsplash.com, charts from TradingView.com,
CryptoQuant.com
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