As Bitcoin’s price continues its rollercoaster ride, understanding the key metrics that might dictate its future movement is crucial for both crypto enthusiasts and investors. This knowledge could be essential for positioning oneself ahead of potential market shifts that may arise in the coming days.
On-chain Insights: Bitcoin’s Momentum Wavers
Kyle Doops, a seasoned technical analyst and the host of Crypto Banter, sheds light on Bitcoin’s potential next steps using the Short-Term Holder Spent Output Profit Ratio (SOPR) metric. The STH-SOPR offers valuable insight into the behavior of short-term investors by analyzing outputs that have been transacted within the last 155 days. In simpler terms, it highlights whether Bitcoin is being offloaded at a profit or a loss.
Despite Bitcoin inching closer to the mesmerizing $100,000 mark, Doops notes that the 30-day average for this crucial metric has lingered around 1.02. This reading hints that short-term investors might be inclined towards profit-taking, which could herald a market retreat.
Historically, such trends have often presented an opportune moment for new investors to acquire Bitcoin at more favorable prices following a market adjustment. "The opportunity could be just around the corner," Doops remarked optimistically.
BTC’s Short-Term Holder SOPR Suggests Possible Profit-taking | Source: Kyle Doops on X
Adding another layer to the narrative, long-term holders are currently showing reduced confidence, unloading substantial portions of their Bitcoin stash. Insights from Doops’ research indicate that over 128,000 BTC have been sold by these long-term holders since October. This shift signifies possible changes in market momentum.
Such moves suggest these investors are cashing in on the recent upswing that nearly touched the $100,000 milestone. It’s a pivotal time in the market cycle, potentially setting the stage for increased volatility as selling pressures mount.
Interestingly, while long-term holders are parting with their assets, the demand from U.S. Spot Bitcoin Exchange-Traded Funds (ETFs) has been robust enough to absorb about 90% of this selling pressure. The strong institutional demand has been a driving force behind Bitcoin’s momentum, nudging its value closer to a crucial milestone that could reshape the broader crypto landscape.
Building Bearish Trends for Bitcoin
Bitcoin’s rally hit a high of $99,500 over the weekend, but the momentum has since slowed, dropping closer to the $92,000 mark. This dip has stirred discussions about possible prolonged downward trends, as many anticipated price corrections.
The primary factor behind this recent decline seems to be profit-taking activities, with signs suggesting that retail investors might be slowly parting with their holdings. In the past 24 hours alone, Bitcoin has dropped over 6%, down to $92,320, showing potential signs of further losses. Yet, investor sentiment remains significantly positive, as reflected in a remarkable 54% surge in trading volume during the same period.
BTC trading at $91,511 on the 1D chart | Source: BTCUSDT on Tradingview.com
Featured image from Unsplash, chart from Tradingview.com.
