Bitcoin STH – SOPR (EMA-30), which has now risen above a price of 1 for the first four months in a row, is a positive sign for the cryptocurrency’s future.
The Bitcoin Short-Term Holder SOPR has Broken Below 1
According to a CryptoQuant analyst, the BTC STH – SOPR has formed a bullish pattern which is historically favorable for the coin.
The “Spent Output Profit Ratio” (or the SOPR in short) is a Bitcoin indicator that tells us whether coins in the market are selling at a profit or at a loss right now.
This metric is based on the historical price of every coin sold, and checks whether it was at a lower or higher than its current value.
If this indicator’s value is higher than 1, it indicates that investors are on average selling Bitcoin for profit.
Possible Timelines For Bitcoin To Hit $100k: Why CEOs See Bullish Signs| Possible Timelines For Bitcoin To Hit $100k: Why CEOs See Bullish Signs
Conversely, SOPRs below one indicate that there are overall losses on the BTC market right now.
This indicator is modified to only include those who have held their coins less than 155 calendar days before selling. These investors are called short-term holders (STH).
Here’s a chart showing the Bitcoin STH–SOPR (EMA-30), trend over the past few years.
Seems that the value of the Metric has gone up recently. Source: CryptoQuant| Source: CryptoQuant
The graph above shows that the Bitcoin STH–SOPR (EMA-30), seems to have followed a certain pattern in the past five years.
The indicator seems to have always been less than one during bearish periods. Bullish trends can also have taken place when the metric had a greater value than one.
After staying under the threshold for almost four months, the STH–SOPR broke above 1.
Data Shows Bitcoin Investors Afraid To Take Risk As Leverage Remains Low| Data Shows Bitcoin Investors Afraid To Take Risk As Leverage Remains Low
This breakout could indicate that Bitcoin may rally to at least a local peak soon if the previous pattern holds.
This uptrend might not last for too long. There are two places in the chart where the metric has broken above 1. The price rose a little, then continued the bearish trend.
BTC price
At the time of writing, Bitcoin’s price floats around $46.1k, down 2% in the past week. This chart illustrates the latest trend in Bitcoin’s price.
BTC price appears to have been moving in a sideways direction over the last few trading days. Source: BTCUSD on TradeView| Source: BTCUSD on TradingView
Unsplash.com featured image, Charts from TradingView.com and CryptoQuant.com charts