Bitcoin Price Trades at a Decessive Point; Short-Term Holders May Suffer Extreme Loss
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Although the crypto markets are painted green, the value of the majority of the tokens trades around the same levels. This may also indicate equal participation of the bulls and the bears as the volatility of the price drops heavily despite a decent volume. It is speculated that this happens at times when the bulls fail to display their strength and the bears are also delaying their action.
A huge rise in short-term trading has been witnessed in recent times, specifically since the markets witnessed a major fallout last year. This highlights the trader’s sentiments, which are filled with uncertainty and fear. Therefore, a new trend has been set up, with the short-term traders extracting profits on every minor spike that has hampered the value of the token and the pace of the rally to a large extent.
Presently, the Bitcoin price appears to be in a decisive phase, and short-term holders could be the primary lens through which to view this correction. Below are a few indicators from Glassnode that justify the probable loss for the short-term holders.
- The Short-Term holder realized the price was heading back to 1. Usually, in bull markets, these levels spike up beyond 2. Hence, indicating the surging bearish influence and hence a swift recovery is necessary to justify upwards.
- The Bitcoin SOPR or Short-Term holder realized Profit/Loss ratio momentum, is trading below 1, indicating loss dominance.
- The short-term holder realized profit or loss has reached equilibrium. Similar to SOPR, a healthy undercut is a positive sign of local cleansing. Besides, if it flips below 1, along with SOPR and MVRV, that would not be ideal, and flipping near-term sentiment would be likely, which may invite the worst.
- Lastly, Bitcoin’s short-term holder SOPR indicator that spots rapid changes in the market regime and trend is extremely responsive and returns to neutral levels. If in case, the levels further drop in the red region, it indicates the correction phase may continue.