Data on the chain shows that short-term Bitcoin holders are increasingly selling at a loss after the latest cryptocurrency price collapse.
Bitcoin short-term holder SOPR further fell below 1
As an analyst pointed out in CryptoQuant postal, The data on the chain shows that the STH SOPR has dropped to the July level, indicating that short-term holders are becoming more aware of their losses.
The output profit rate spent, or “SOPR“In short, it is a Bitcoin indicator that tells us whether investors are selling at a loss or at a profit in a certain period of time.
The value of this indicator is calculated by calculating the ratio between the value of coins that took time and the value of coins that were created.
If SOPR is lower than 1, it means that investors will sell at a loss on average. And if it floats above the threshold, then the entire market is profitable. It is exactly equal to 1, which means that the holder is breaking even.
A slight modification of this indicator is STH SOPR, It only measures the profit margin of coins that were held for less than 155 days before the sale.
These coins are usually assumed to be supplied by short-term holders (STH). Therefore, STH SOPR emphasizes whether these holders sell at a profit at a specific time.
Now, here is a chart showing the trend of the Bitcoin indicator over the past year:
Looks like the the value of the indicator has sharply dropped recently | Source: CryptoQuant
As you can see in the chart above, the Bitcoin STH SOPR dropped to 0.95 yesterday. The last time a similar low was observed was in July.
These current low values indicate that short-term holders are now increasingly dumping their tokens at a loss. A similar trend appeared after the BTC crash in May.
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The analyst in the post believes that either the token may now follow a horizontal movement similar to that seen at the time, or it may provide the final support for Bitcoin as it was in July.
At the time of writing, Bitcoin price Floating around US$48,400, it has fallen by 15% in the past 7 days. In the past month, the value of cryptocurrencies has fallen by 20%.
The chart below shows the price trend of BTC over the past five days.
BTC's price has mostly moved sideways since the crash | Source: BTCUSD on TradingView
A few days ago, the price of Bitcoin plummeted to $42,000 and then rose back to current levels. Since then, cryptocurrencies have mostly consolidated horizontally.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com