- Bitcoin veterans realized profits on their BTC stocks.
- The decline in the chain’s output ratio could be a warning of a deeper correction.
Bitcoins [BTC] The SOPR measure spiked again, and investors have reason to fear market volatility.
Over the past ten days we have seen an increase in selling pressure leading up to the halving, as uncertainty began to increase. Long-term holders (LTHs) contributed to this pressure.
Analysis of the liquidation heat map in a previous AMBCrypto report showed that the $66k-$66.8k region represented key short-term resistance.
BTC has not crossed this zone, increasing the likelihood of volatility in the coming days.
The SOPR trendline and why traders should consider it
The Spent Output Profit Ratio (SOPR) reflects the degree of profit and loss realized for all coins moving in the chain.
It is measured as the ratio of the USD value of Bitcoin’s output issued at the time of time spent, or value realized, to the output issued at the time of value created.
This allows analysts to get a good idea of whether holders are making a profit. Per CryptoQuant InsightsA specific variation of the SOPR ratio showed that more and more long-term holders are cashing out their shares.
The downward trend line from ten years ago showed that a potential market top was approaching. The possibility of a deeper Bitcoin correction was present due to the firm rejection of this trendline metric.
Short-term Holder Activity: What is the Current Price Trend for Bitcoin?
The short-term SOPR is concerned with Bitcoin being alive for more than an hour but less than 155 days. The STH SOPR fell to 0.998 on April 22, showing that short-term investors were selling at a small loss.
Compared to the 2020 bull run, the benchmark did not fall below zero after September. The halving for that cycle occurred in May, and a correction in August caused this ratio to fall below 1.
Bitcoin could follow a similar path during this cycle.
Source: BTC/USDT on TradingView
The daily chart showed that Bitcoin has been trading within a certain range since March. The upper time frame trend and market structure were solidly bullish.
Read Bitcoin’s [BTC] Price forecast 2024-25
However, the RSI has fluctuated between 40 and 60 values over the past month, indicating a lack of strong momentum.
The OBV also could not avoid the highs of mid-March. Encouragingly, the price has crept up over the past ten days due to increased buying pressure. Overall, a price correction remained possible.