Bitcoinโs On-Chain Metric Suggests More Downside Before Rebound
The likelihoodย of further decline followed by a rebound in Bitcoinย (BTC) can be inferred from a specific on-chain metric.
Bitcoinโs SOPR Indicates Short-Term Holders are Selling at a Loss
An analyst stated that BTCโs short-term holders are asย ofย now selling their coins at a loss, as indicated by the Spent Output Profit Ratio (SOPR).
Andย once the SOPR value is over 1, it signifies that the average holder is selling at a profit. Conversely, values below this threshold indicate that most holders are selling at a loss.
Andย once the SOPR is exactly 1, it impliesย that the market is breaking even as the total discovered profits offset the losses.
The SOPR can likewise be measured inย particularย for short-term holders (STH) who have held their coins for less than 155 days.
Bitcoinโs SOPR Breaks Support Level, More Decline Possible
Historically, the 30-day moving average of Bitcoinโs SOPR has found support at a certain level, leading to rebounds. Nonetheless, the recent drawdown has breached this levelย ofย support, indicating that STHs are asย ofย now selling their coins at a loss.
Typically, when the SOPR falls below this level, it takes time for it to rise over it again, as the level begins to act as resistance.
Theย present SOPR is still significantly over the bottoming zone where rebounds have previously tookย place, suggesting that more decline couldย be necessary for STHs to capitulate at aย bigger extent.
Short-Term Outlook for Bitcoin Price
Bitcoinย (BTC) has been experiencing a period of sideways movement, struggling to break in either direction. Currently, the price hovers around $25,700.
Hot Take: Further Decline Expected Before Bitcoinย (BTC) Rebounds
Based on the analysis of the SOPR and theย present price movement, it is likely that Bitcoinย (BTC) will face more downside before finding a rebound. This is supported by the selling behavior of short-term holders, indicating a need for deeper capitulation. Nonetheless, as with any market prediction, uncertainty remains.
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