Bitcoin bulls stand firm as short-term traders prepare for a potential drop

• Short-term holders have increasingly sold their BTC holdings in recent days.
• However, there is still bullish sentiment in the market.

According to pseudonymous CryptoQuant analyst CryptohellBitcoins [BTC] The Exchange Reserve metric has risen as the royalties trade at nine-month highs, indicating that traders have cashed in on the latest price rally to turn a profit.

BTC’s Exchange Reserve was 2.19 million BTC at the time of writing. This metric is an aggregate measure of potential coins sitting on cryptocurrency exchanges and ready to be sold in the market.

An increase indicates higher selling pressure persists in the market, while a decrease suggests traders favor accumulation.

Source: CryptoQuant

In an uptrend, Cryptohell opined that based on the characteristics of BTC’s Exchange Reserve, “short-term traders are likely to be the ones sending Bitcoin to the exchanges.”

Is your portfolio green? Check Bitcoin Profit Calculator

The analyst considered BTC’s Short-Term Output Profit Ratio (STH-SOPR) calculation to find out what short-term traders have been doing.

At 1:05 AM, Cryptohell stated that this metric indicated that short-term holders were in control of the market and were involved in significant coin distribution volume.

Furthermore, Cryptohell explained that this group of investors has taken to selling their holdings due to various factors affecting the current market situation.

These factors include the upcoming FOMC meeting on March 22, the majority of Muslim traders withdrawing their investments as Ramadan approaches, and traders who are happy with their profits and plan to exit the market when it reaches $30,000.

On why the $30,000 price tag was important, Cryptohell said:

“The $29k to $32k price range is a resistance that needs to be considered. So it is understandable that with today’s price already at $27k+, traders are preparing to gradually sell Bitcoin supply. The most noticeable factor currently affecting the market is however, the FOMC meeting…”

Bullish sentiment hangs on the chain

While BTC short-term traders may be involved in coin distribution in anticipation of a price drop, an assessment of BTC’s on-chain performance confirmed that sentiment remained significantly bullish.

Per data from Santiment, BTC’s weighted sentiment was 2.407, at press time.

Source: Sentiment

A positive value of an asset’s weighted sentiment confirms that the market is convinced that the asset’s price will grow further. Moreso, BTC’s MVRV ratio was 40.49%, indicating that many BTC holders continued to hold with profits. Therefore, many investors have no reason to have bearish sentiments.

Read Bitcoins [BTC] Price prediction 2023-2024

Moreso, after last weekend’s price decline sent BTC’s funding rates negative for the first time this year, improved price performance during the week saw it regain its place in positive territory.

BTC’s positive funding rates suggested that many traders believed that the leading coin’s price would see more growth.

Source: CryptoQuant

Finally, Open Interest has also seen an increase in recent days, lending credence to the fact that BTC investors have remained bullish.

Source: Coinglass