Bitcoin Price Decline Puts Short-Term Holders in the Red

Conditions Less Favorable for Short-Term Bitcoin Holders

Are you a short-term bitcoin holder? Well, the latest on-chain metric suggests that conditions might not be in your favor right now. The Short Term Holder Spent Output Profit Ratio (STH-SOPR) has decreased, indicating a decline in profitability for trades involving bitcoins held for less than 155 days.

According to CryptoQuant Analyst Adam Mourad, a declining STH-SOPR during a price correction can lead to panic-selling among short-term holders, which in turn contributes to a drop in prices. It creates a self-reinforcing cycle of declining prices.

Mourad analyzed the STH-SOPR since the price spike that followed Grayscale’s legal win against the SEC. The stabilization of the STH-SOPR at the 1 mark indicated that short-term holders could sell their bitcoins without making a profit or incurring a loss.

So, if you’re a short-term holder, be cautious. The current market signals, including the price of bitcoin stuck below $26,000, suggest that investor anticipation of spot bitcoin ETF approvals might be wearing thin in the short term.

Hot Take: Short-Term Bitcoin Holders Should Exercise Caution

If you’re a short-term bitcoin holder, it’s important to exercise caution in the current market conditions. The declining Short Term Holder Spent Output Profit Ratio (STH-SOPR) indicates a decrease in profitability for trades involving bitcoins held for less than 155 days. This could lead to panic-selling among short-term holders and a further drop in prices.

Analyst Adam Mourad suggests that short-term holders should pay attention to the STH-SOPR stabilization at the 1 mark. This indicates that bitcoins can be sold without making a profit or incurring a loss. However, given the current market signals and the price of bitcoin stuck below $26,000, it’s crucial to be cautious and consider the potential risks involved.

So, if you’re considering selling your bitcoins as a short-term holder, it’s essential to weigh the potential gains and losses carefully. The market conditions and investor anticipation of spot bitcoin ETF approvals might not be in your favor in the short term.