Data Suggests Latest Bitcoin Correction Was Driven By Short Term Holders
Just who on earth would sell their Bitcoin at this moment in time? It just baffles me.
Bitcoin Short-Term Holders Behind The Correction?
As pointed out by a CryptoQuant post, on-chain data may hint that selling from short-term holders might be the drive behind the recent correction.
The relevant indicator here is the Spent Output Profit Ratio (or SOPR in short). This metric shows the total amount of profit or loss that investors are realizing in a given time period.
When the value of this indicator is over one, it means holders are selling their coins at a profit on an average. While values below one would suggest sellers are dumping their Bitcoin at a loss. SOPR values exactly equal to one means the overall market is currently breaking even.
To check whether short-term holders are in the process of profit taking or not, the indicator is modified to take into account the age of the coins.
The short-term supply consists of all the Bitcoin that last moved less than 155 days ago (but more than one hour ago). These coins usually belong to traders who keep intensively shifting their positions with each move in order to maximize their profits.