According to on-chain data, the Bitcoin short-term holder SOPR broke above 1 for the first-time since December 2021.
The Bitcoin Short-Term holder Returns To Profit Again
As pointed out by an analyst in a CryptoQuant post, the BTC STH SOPR has once more broken past the “one” barrier.
The “Spent Output Profit Ratio” (or SOPR in short) is a Bitcoin indicator that tells us whether coins selling right now are selling at a profit or a loss.
You can use the metric by looking at the history price of every coin sold on the chain in order to determine its last move at.
The coin is considered to have been sold for profit if the previous price was lower than the current. The current price of the coin is less than its previous one, which is a loss.
If the Bitcoin SOPR value is lower than 1, it indicates that investors are selling at a loss on average. However, ratios above 1 indicate that the market overall is making a profit.
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An amended version of this indicator shows only coins which were kept for less than 55 days before they are sold.
Such coins belong to a cohort of investors called the “short-term holders.” The below chart shows the trend in the Bitcoin STH SOPR (30DMA) over the past year:
It seems that the indicator has just passed over "one" recently. Source: CryptoQuant| Source: CryptoQuant
You can see that Bitcoin STH SOPR broke above one in the graph. Since December last year, this is the first time short-term investors have made a profit selling Bitcoin STH SOPR.
It is important that the SOPR equals 1 line represents a break-even point. In the past, the mark was used to support the price of crypto.
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It has been resistance because it is a break-even. Reaching the mark psychologically feels like getting their money “back” to investors who were in loss previously so they tend to sell around this mark, hence leading to it becoming resistance.
The metric failed to test the level a month ago and then rebounded. We don’t know if the Bitcoin STH SOPR will surpass one this time.
BTC price
At the time of writing, Bitcoin’s price trades around $41.2k, down 5% in the past week.
Source: BTCUSD on TradingView| Source: BTCUSD on TradingView
Unsplash.com featured image, Charts from TradingView.com and CryptoQuant.com charts