Following a surge to as high as $20.9k, Bitcoin has today seen a slight decline back into the low $20k levels due to profit taking by short-term holders.
According to an analyst in a CryptoQuant post, short-term holders appear to be profiting from the recent price increase.
The relevant indicator in this case is the “Spent Output Profit Ratio” (SOPR), which tells us whether the average investor is currently selling Bitcoin for a profit or a loss.
When the value of this metric exceeds one, it indicates that the overall market is currently profitable.
Values below the threshold, on the other hand, indicate that the holders as a whole are selling at a loss.
Naturally, SOPR values exactly equal to one indicate that investors are currently just breaking even on their selling.
In the Bitcoin market, there is now a group known as “short-term holders” (STHs), which includes all investors who have held their coins for less than 155 days.
This rise has coincided with the BTC price finally surging up after a long period of trading sideways around $19k. This suggests that these investors are taking advantage of this opportunity to profit.
Profit-taking is generally bearish for cryptocurrency prices, and as the chart shows, there have been three instances of this type of trend in the last two weeks.
All of those profit-taking sprees by STHs resulted in the price falling after a brief increase.
This time, the Bitcoin price fell from its high of $20.9k to as low as below $20.1k before retracing back up to the current level.
