On-chain data shows that the behavior of short-term Bitcoin holders has continued to diverge from the price in recent weeks.
SOPR of short-term Bitcoin holders continues to move mostly sideways
As a CryptoQuant analyst pointed out Positionwhile prices have fallen recently, short-term holders have instead made more profits.
The relevant metric here is “Profit rate of consumption production(SOPR) shows whether the average Bitcoin investor is currently selling profitably or losing money.
If the value of this metric is greater than 1, it means that all holders are currently making some profit and moving the coin. On the other hand, an SOPR below the threshold indicates that the overall market is losing a lot at the moment.
Naturally, an indicator whose value is exactly equal to 1 means that the market participant is at breakeven with the current sell.
Currently, there is a cohort in the BTC market called “”.short term holder(STH) includes all investors holding the coin within 155 days.
Here is a chart showing the trend of the 7-day moving average SOPR specific to this group of Bitcoin holders.
Looks like the value of the metric bounced off the 1 mark recently | Source: CryptoQuant
As you can see from the chart above, Bitcoin short-term holders SOPR is currently in the region below 1, meaning these investors have been selling at a loss lately.
The indicator has actually been trapped in this zone for several months as 1 level offers resistance during this period.
During the May and June crashes, the value of the metric soared as STH surrendered and was sold at a heavy loss. However, while prices have fallen (albeit steadily) in recent months, the STH SOPR has shown no similar signs of surrender.
Quants show this discrepancy in charts. Rather than STH suffering a larger loss as a result of the price drop, it actually lost less in recent weeks as the SOPR rose to a value closer to 1.
At the time of writing, Bitcoin price Fluctuated around $19.1k, up 1% last week. Over the past month, cryptocurrencies have gained 4% in value.
The chart below shows the coin’s price trend over the last 5 days.
The value of the crypto seems to have been continuing its endless consolidation in the last few days | Source: BTCUSD on TradingView
Featured image from Michael Förtsch on Unsplash.com, charts from TradingView.com, CryptoQuant.com