Bitcoin STH SOPR Breaks Above 1 For First Time Since December


On-chain data shows that short-term Bitcoin holder SOPR broke above one for the first time since December 2021.

Short-term Bitcoin holders are back in profit again

As pointed out by an analyst at CryptoQuant mailBTC STH SOPR has once again broken the “one” barrier.

The “Output Profit Ratio“(or SOPR for short) is a bitcoin indicator that tells us whether the coins that are currently being sold are selling at a profit or a loss.

The metric works by looking at the price history of each coin sold in the chain to see what price it last moved at.

If the last price is lower than the current price, the coin was sold at a profit. Likewise, the loss is when the current price is lower.

When the value of Bitcoin SOPR is less than one, it means that investors are, on average, selling at a loss at the moment. On the other hand, ratio values ​​above one indicate that the market as a whole is currently making a profit.

Related reading | Could the 600-day moving average support line push Bitcoin again?

A modified version of the indicator only shows the percentage of profit for those coins that were held for less than 155 days before being sold.

These coins belong to a group of investors called “short term owners. The chart below shows the trend in Bitcoin STH SOPR (30DMA) over the past year:

short term bitcoin holder SOPR

The indicator seems to have just crossed over the "one" mark recently | Source: CryptoQuant

As you can see in the chart above, Bitcoin STH SOPR has broken above one again over the past few days. This is the first time that short-term holders have sold at a profit since December last year.

The significance of SOPR equal to one line is that it acts as a break-even point. The mark has acted as a support for the cryptocurrency price in the past.

Related reading | Bitcoin mimics the sentiment cycle in the textbook market, what happens when confidence returns?

But also, since it was a break-even point, it also acted as a resistance before. Psychologically hitting the mark is like giving their money back to investors who were previously at a loss, so they tend to sell around that mark, causing it to turn into resistance.

Only a month later or earlier, the gauge retested the level, but failed and bounced back down again. It now remains to be seen if Bitcoin STH SOPR will hold above one or not.

BTC price

At the time of writing this report, Bitcoin price It is trading around $41.2K, down 5% in the last week.

Bitcoin price chart

BTC's price shows some recovery | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com



Leave a Comment

Your email address will not be published.