- Bitcoin selling pressure increased as short-term holders saw gains.
- MVRV ratio indicated that long-term holders are not allowed to sell.
In the past month, Bitcoin’s [BTC] price fell after hitting the $30,000 mark. As many short term traders took advantage of this price correction and started accumulating BTC after prices fell.
Read Bitcoin [BTC] Price forecast 2023-2024
BTC under pressure
Over time, however, these short-term traders saw profits. According to Glassnode’s data, most short-term holders started seeing gains after BTC’s price crossed $25,200. At the time of writing, the price of BTC was $26,765.18, according to CoinMarketCap.
This indicated that many short-term holders were already profitable. This increase in profits could prompt these holders to sell their holdings and lower Bitcoin’s price.
Interesting behavior was also observed by other unprofitable traders. According to the SOPR (Spent Output Profit Ratio), many addresses sold their BTC at a loss as the SOPR fell below 1.
SOPR is a tool that measures whether Bitcoin holders are selling at a profit or loss. During market corrections, some Bitcoin holders who bought near the top may panic and sell their coins at lower prices, resulting in realized losses. SOPR tracks this behavior and can help identify potential bottoms in the market.
When SOPR falls below 1, it indicates that more coins are being sold at a loss than at a profit. This may signal a potential bottom in the market as most of the sellers who bought near the top have now exited their positions.
Source: Glassnode
However, the same selling pressure that short-term holders faced was not seen by addresses holding their BTC for longer periods of time. According to data from Santiment, the MVRV ratio had fallen significantly in recent weeks.
This indicated that BTC was no longer in an overbought position and that long-term holders had little incentive to sell their holdings.
Source: Sentiment
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Tricks of the trade
Despite these positive factors, traders remained bearish on BTC. According to Coinglass, the number of short positions taken against BTC has increased significantly. In recent days, the percentage of all short positions taken has risen from 50 to 52%.
Only time will tell if the traders are right in the long run.
Source: Coinglass