Bitcoin Short-Term Holder SOPR Is Retesting 1.0 Right Now
The “SOPR” here refers to an on-chain indicator that tells us about whether the Bitcoin investors as a whole are selling or transferring their coins at a profit or loss.
What is SOPR?
When the value of this metric is greater than 1, it means the average holder of the asset is selling at a net profit. On the other hand, it being under this threshold suggests the overall market is realizing a net loss.
Naturally, the SOPR being exactly equal to the 1 level implies the profits being realized by the investors are canceling out the losses, so the average holder can be assumed to be just breaking-even on their transactions.
Short-Term Holder SOPR
In the context of the current topic, the SOPR of only a specific investor group is of interest: the short-term holders (STHs). The STHs include the Bitcoin investors who purchased their tokens within the past 155 days.
Current Trend
The value of the metric appears to have returned to the neutral level in recent days | Source: Glassnode on X
Historical Context
As is visible in the above graph, the Bitcoin STH SOPR fell under the 1 mark earlier in the year, implying the STHs took to loss-taking as the price of the cryptocurrency moved in a bearish trajectory.
Recently, though, the metric has been making recovery and it’s now back at the break-even level. “Historically, breaking above 1.0 confirms a shift in momentum, while failure to do so often leads to renewed sell pressure,” explains Glassnode.
Breaking above 1.0
Breaking above the level is no simple task, for it serves as a major psychological level for the STHs. These investors are by definition the entities who are either new to the market or just not resolute enough to hold for long periods, so they can be prone to panic selloffs.
When the STH SOPR rises to the 1 mark, it means these investors, who were forced into loss selling earlier, are able to break-even again. Selling pressure can spike when this happens, as STHs rush to get their money ‘back’.
Conclusion
The short-term holder SOPR is currently retesting the 1.0 level, which has historically acted as a boundary line between bearish and bullish momentum. If it is able to break above this level, it could signal a shift in momentum, while failure to do so could lead to renewed sell pressure.
FAQs
What is SOPR?
SOPR is an on-chain indicator that measures whether Bitcoin investors are selling or transferring their coins at a profit or loss.
What does a SOPR of 1 mean?
A SOPR of 1 means the average holder of the asset is selling at a break-even level, with profits and losses cancelling each other out.
What is the significance of the 1.0 level in the context of STH SOPR?
The 1.0 level is a major psychological level for short-term holders, and breaking above it can signal a shift in momentum, while failure to do so can lead to renewed sell pressure.
What is the current state of the Bitcoin STH SOPR?
The current state of the Bitcoin STH SOPR is retesting the 1.0 level, which has historically acted as a boundary line between bearish and bullish momentum.
