Check out the article from CryptoQuant explaining STH, or Spent Output Profit Ratio. Don’t be a short-term holder.
Bitcoin short-term holders are increasingly selling at a loss following the latest crash in the crypto’s price, on-chain data shows.
Bitcoin Short Term Holdings Are Being Realized At A Loss
The STH SOPR has decreased to July levels, indicating that short-term holders are increasingly realizing their losses, as an analyst pointed out in a CryptoQuant post.
During any given period, SOPR, or Spent Output Profit Ratio, tells us whether investors are selling at a loss or at a profit.
By taking the ratio between the value of coins at the time of creation, and that at the time of spend, the metric’s value is calculated.
Investors sell at a loss on average if the SOPR drops below one. The market makes money if it floats above the threshold: if it is exactly equal to one, then holders break even.
STH SOPR is a slightly modified version of this indicator that measures the profit ratio of only those coins that have been held for less than 155 days before being sold.
STH SOPR reveals whether short-term holders (STH) were profiting or not when they sold these coins.
The following chart shows how Bitcoin has trended over the past year:
The Bitcoin STH SOPR dropped to 0.95 yesterday, as you can see in the above graph. Similar lows were last observed during July.
A similar trend was seen following the May BTC crash when short-term holders were increasingly dumping their coins at a loss.
This analyst believes that the coin may now follow a similar sideways movement as was seen in July, or it may set up a final leg up for Bitcoin.
Bitcoin Price Prediction
According to CoinDesk, Bitcoin is currently trading at $48.4k, down 15% in the last week. The crypto market has lost 20% of its value over the last month: The chart below illustrates BTC’s price over the last five days.
Earlier this week, Bitcoin’s price plummeted to $42k before rising back up to current levels. Bitcoin’s price has been mostly sideways since then.
Via this site.