Bitcoin gained a little over 3%, pushing its worth to $43.8k, with an 11% surge compared to its value a week ago. Amidst the fluctuation fueled by macroeconomic patterns, it seems that short-term investors are selling their holdings at a loss.
However, according to the latest insights from CryptoQuant, the market is anticipated to bounce back shortly.
Short-Term Bitcoin Dumping Indicates Market Reversal
The on-chain market intelligence platform revealed that short-term Bitcoin investors are selling at a loss. This was evidenced by CryptoQuant’s “Short-Term Holder SOPR” (SOPR), which is a metric used to assess realized profit or loss, specifically for coins held for more than 1 hour but less than 155 days.
It serves as an indicator of whether investors who have held a coin briefly before trading it have profited, with a value surpassing 1, indicating that a significant proportion of these investors have realized gains on their short-term investments. On the other hand, a value below 1 suggests that a considerable number of investors have incurred losses.
Lately, this metric has been indicating values below 1, implying that short-term holders of the leading crypto asset are selling at a loss. This could mean that whale investors are likely to interpret this as a favorable buying opportunity, leading them to purchase the Bitcoin being offloaded by short-term investors. As a result, the market is anticipated to rebound shortly.
#BTC Short Term Holder SOPR Losses, DCA Opportunities
— CryptoQuant.com (@cryptoquant_com) January 29, 2024
Bitcoin’s Exchange Exodus
Since the approval of spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC) on January 10, Bitcoin has been consistently exiting exchange wallets, signaling a notable shift in market dynamics.
According to analysts at crypto intelligence tracker Santiment, this departure coincides with a downward trend in Bitcoin’s exchange supply, occurring simultaneously with a steady increase in stablecoin reserves over the past five weeks.
The surge in USDT reserves on exchanges is interpreted as a sign of growing buying power, implying that the mid-term bull cycle, which started in October, still possesses momentum. Additionally, the upcoming fourth halving event, historically known to catalyze price surges, is anticipated to take place on April 18, further fueling optimism among Bitcoin investors and analysts alike.