Bitcoin Market Headwinds To Continue? Short-Term Holder SOPR Remain In Negative Territory

The previous week was quite interesting for Bitcoin as it recovered the $88,000 mark but faced significant resistance at this level, leading to a pullback near $81,000. During this movement, BTC saw notable selling pressure from investors who sold their holdings at a loss.

Persistent Negative Bitcoin Short-Term Holder SOPR

Bitcoin’s bearish pressure is intensifying as it struggles within the $83,000 and $82,500 price range after a drop from the $88,000 level. Thus far, Short-term holders seem to be taking the ongoing volatility in the market harder than long-term holders.

A recent research shared by on-chain and technical expert Darkfost on X (formerly Twitter) has outlined a persistent trend among short-term Bitcoin holders. Darkfost revealed the trend after delving into the Bitcoin Short-Term Holders Spent Output Profit Ratio (SOPR) Multiples metric, which compares the realized selling price with the original purchase price.

This development indicates that short-term holders are still realizing losses on their BTC holdings. According to the on-chain expert, the key metric has stayed within the negative territory for over 2 months.

Data from the metric shows that the short-term holder SOPR is currently fluctuating around the 0.98 level, which implies that these investors are offloading their coins at a loss. The persistent negative SOPR trend reflects a challenging market environment where weak hands continue to give up while long-term holders await signs of renewed strength in Bitcoin’s price action.

Typically, when the ratio falls below level 1, it suggests that short-term holders are capitulating, which frequently results in brief price reductions. With BTC’s price struggling to recover, the bearish movement is likely to extend as the SOPR indicator continues to show weakness.

Specifically, the trend was determined by observing the amount of BTC being sent to crypto exchanges at a loss. Presently, about 46,000 BTC has been transferred to crypto exchanges to be sold at a loss, reflecting low confidence among investors. Darkfost highlighted that these developments are blatant indicators that the market will be challenging in the short term.

Short-Term BTC Holders In Loss

During the recent correction, short-term holders accumulated significant losses. World-leading on-chain data and financial platform Glassnode reported that the overall loss realization in the Bitcoin market was recorded among these investors, often classified as holders of less than 155 days.

While these holders witnessed substantial losses, long-term holders, usually those holding BTC for at least 155 days, remain in profit. However, the long-term holders are the major cause of profit-taking.

Data shows that the losses incurred by short-term holders of BTC are now almost equal to the profits taken by long-term holders. This return to a neutral zone indicates a slowdown in profit-taking resistance, a stagnation in capital inflows, and a decline in demand.