Bitcoin short-term ownership behavior continues to show divergence from price

On-chain data shows that short-term Bitcoin holder behavior has continued to deviate from price in recent weeks.

Bitcoin short term holds SOPR continues to move mostly sideways

As pointed out by an analyst in a CryptoQuant post, while the price has declined recently, short-term holders have instead made more.

The relevant indicator here is the “Spent Output Profit Ratio” (SOPR), which tells us whether the average Bitcoin investor is currently selling at a profit or at a loss.

When the value of this metric is greater than 1, it means that the holders as a whole are moving coins with some profit right now. On the other hand, SOPR that is below the threshold suggests that the overall market is realizing an amount of loss at the moment.

Naturally, the indicator with values ​​exactly equal to 1 suggests that market participants break even only when they are currently selling.

Now there is a cohort in the BTC market called “short-term holders” (STHs), which includes all investors who have held their coins since less than 155 days ago.

Here is a chart showing the trend in the 7-day moving average SOPR specifically for this group of Bitcoin holders:

Looks like the value of the metric bounced off the 1 mark recently | Source: CryptoQuant

As you can see in the graph above, Bitcoin short-term holder SOPR is in the sub-1 region right now, which means these investors have been selling at a loss recently.

The metric has actually been trapped in this zone for several months now, as the 1 level has provided resistance against it during this period.

During the crash in May and June, the indicator’s value went down as STHs capitulated and sold at heavy losses. But in recent months, while the price has declined (albeit steadily), STH SOPR has shown no signs of similar capitulation.

The quant has marked this divergence in the diagram. Rather than STHs going into deeper losses as a result of the price decline, they have actually been selling at fewer losses in recent weeks as their SOPR has climbed to values ​​close to 1.

BTC price

At the time of writing, Bitcoin’s price is hovering around $19.1k, up 1% in the last week. Over the past month, the crypto has increased 4% in value.

The chart below shows the trend in the price of the coin over the last five days.

The value of the crypto seems to have been continuing its endless consolidation in the last few days | Source: BTCUSD on TradingView

Featured image from Michael Förtsch on Unsplash.com, charts from TradingView.com, CryptoQuant.com