Bitcoin (BTC) has reached a “decision point” for price action, but speculators rule, new analysis says.
In the findings uploaded on Twitter on May 26th Checkmate – the lead on-chain analyst at Glassnode – revealed the ongoing BTC price settlement.
Analyst Warns Bitcoin Bulls ‘Doing Nothing’
Struggling with key trendlines, BTC/USD is giving a growing number of long-term market participants cold feet this month.
As predictions of lower prices As for where the price could go next, the attention of analysts in the chain is increasingly focused on short-term holders (STH).
As reported by Cointelegraph, various metrics specifically covering STH — defined as entities that hold coins for 155 days or less – are “reset levels” is coming after a period of exuberance.
For Checkmate, this could be the healthy retracement required for the bull market to continue in 2023; but things could go wrong just the same.
“Bitcoin is currently at a decision point, with short-term holders the primary lens watching this correction,” he concluded.
Several metrics covering STH’s profitability are on the radar.
STH market value to realized value (STH-MVRV)
STH-MVRV measures the value of coins moved by STH compared to the value of those coins as a fraction of the total market capitalization of Bitcoin. When it is at 1.0, it corresponds to the realized price of STH, which is the aggregate price at which STH coins last moved – their breakeven point.
STH-MVRV is currently at 1.022, so a reading of 1.0 corresponds to a BTC spot price of around $26,500.
“In bull markets, this level ($26.5000) should offer good psychological support. We can trade below it, but a quick recovery would be necessary to justify a continuation to the upside,” Checkmate commented.
Holder’s short-term performance expended ratio (STH-SOPR)
STH-SOPR, as described by Glassnode, is a “price sold versus price paid” metric that measures the profitability of outputs spent.
Currently below the 1.0 mark, it indicates “loss dominance” among STHs and calls for bearish buyers to take the next step. SOPR does not distinguish between large and small transactions and focuses purely on the number of outputs spent.
“STH losses can ONLY be taken from local top buyers and we want the top buyers to sell the local bottom. This creates a FOMO backlash,” explains Checkmate.
Likewise, the holder’s short-term realized profit/loss — the volume-adjusted version of SOPR — is in danger of turning bearish. However, for this to occur, he would have to spend a “consistently” amount of time below 1.0.
The short-term holder realized the momentum of the profit/loss ratio
Finally, a trend back into “neutral” territory is also visible in the metric, which alerts observers to sudden changes in trend when it comes to STH’s profitability.
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Momentum is retreating from its “green” phase, which has been in place since January 2023, when Bitcoin’s price recovery began.
“STH Profit/Loss momentum is a tool designed to detect rapid changes in market mode and trend. It is extremely sensitive and has returned to neutral,” the post added.
“If this thing turns red, that would be the first signal that a deeper correction is in play.” He has consistently signaled trend reversals, often before the first breakout has occurred.”
Finally, Checkmate called on hodlers – currently idle and unwilling to spend coins – to intervene.
“Bulls need to put in the work if they want higher prices,” he wrote.
“The HODLs sure do, but they don’t do anything with their coins. We have almost idle ATH coins.”
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This article does not contain investment advice or recommendations. Every investment and trading step involves risk and readers should do their own research when making decisions.
