Bitcoin Short-Term Holder SOPR Continues to Test Break-Even Level
On-chain data reveals that a crucial Bitcoin indicator, known as the Short-Term Holder SOPR, is currently retesting the bear-bull transition point. However, it has not yet managed to break through.
According to an analyst in a CryptoQuant post, short-term holders have been selling their Bitcoin at a loss recently. The indicator in question is the Spent Output Profit Ratio (SOPR), which provides insight into whether the average investor in the Bitcoin market is currently selling at a profit or a loss.
When the value of the SOPR metric is greater than 1, it indicates that the overall market is experiencing more profits than losses from selling. Conversely, values below the threshold suggest that loss-taking dominates the sector.
A SOPR value of exactly 1 means that the total profits realized by investors are canceling out the losses, indicating that the average holder is breaking even on their sales.
A chart depicting the trend in Bitcoin SOPR over the past couple of years shows that the metric has been hovering around the break-even mark for both short-term and adjusted SOPR. This suggests that the average holder is currently selling at a slight loss.
The Bitcoin ASOPR, which filters out the sales of coins that were sold within one hour of their previous sales, has been consolidating around the 1 mark recently. It has made several attempts to break into the profit territory but has not been successful so far. Historically, the ASOPR has been in the red zone during bearish periods and in the green region during bullish periods.
Another closely related indicator is the short-term holder SOPR, which focuses on investors who have held their coins for less than 155 days. Whenever the SOPR for these holders has entered the profit zone, the price of Bitcoin has experienced an uptrend. However, the current value of the STH SOPR is in the red zone, indicating that these holders are experiencing more losses than the rest of the sector.
Currently, the indicator is once again testing the break-even mark. If it manages to break through, it could signal the start of a bullish trend, similar to what has been observed in the past few months.
In the past day, Bitcoin has seen a significant surge in price, surpassing the $27,000 level.
Featured image from Art Rachen on Unsplash.com, charts from TradingView.com, CryptoQuant.com
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