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Bitcoin flashes a profit signal, but only for THESE holders

2min Read

BTC’s rally above $70k has pushed the value of a key metric above 1, signaling that the coin’s short-term holders are sitting on profit.

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  • Bitcoin’s short-term holders now hold their coins at a profit.
  • BTC’s future open interest has risen to a two-month high.

Bitcoin’s [BTC] Spent Output Profit Ratio (SOPR) for its short-term holders (STH) has rallied above 1, signaling that this cohort of investors now holds their coins at a profit.

In a new report, pseudonymous CryptoQuant analyst Phi Deltalytics found that the uptick in this metric’s value above 1 suggests the presence of  “bullish sentiment in the market.”

BTC’s STH-SOPR measures whether investors who have held the coin for three to six months are selling at a profit or a loss.

When it returns a value above 1 such as this, it indicates that short-term holders, on average, are selling their coins at a profit. Conversely, if the STH-SOPR is below 1, it suggests that these holders are selling at a loss.

Why the value above 1 is significant

According to CryptoQuant’s data, BTC’s STH-SOPR was 1.019 at press time.

Bitcoin Short Term Holder SOPR (EMA 7)

Source: CryptoQuant

Before this metric steadied at this point, it had cratered to the 1 level but did not drop below it, Deltalytics found.

According to him, when that happened, the coin traded at a price at which sellers were neither making nor losing money. This led many market participants to hold on to their coins instead of selling them. This was a positive sign for the market, signaling low selling pressure.

The analyst added that BTC’s STH-SOPR must stay above 1. If this happens, the market will “absorb” any profit-taking by sellers without the risk of a significant price drop.

Predicting that this might aid the sustainability of the BTC’s current price rally, Deltalytics added:

“With the market not overly heated, this dynamic has the potential to push Bitcoin’s price upwards.”


Is your portfolio green? Check out the BTC Profit Calculator


BTC amid the recent price rally

The leading coin has benefitted from the market rally in the past 24 hours. At press time, BTC was trading at $71,212, and its price had grown 6% during that period.

The period under review has been marked by a significant uptick in trading activity in BTC’s derivatives market. According to Coinglass’ data, BTC’s derivatives volume has risen 112% in the past 24 hours.

At $35 billion at the time of writing, BTC’s futures open interest sat at its highest level since March.

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Abiodun is a full-time journalist working with AMBCrypto. He is also a lawyer with over 2 years of experience. With a keen interest in blockchain technology and its limitless possibilities, Abiodun spends his time understanding the technology, building projects, and educating people about it.
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