Bitcoin Crashes To $ 58,000 As Short-Term Holders Take Profit

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Bitcoin crashed to $ 58,000, and on-chain data may suggest short-term holder profit taking could be the cause of the event.

On-chain data shows short-term Bitcoin holders take profits

As one analyst pointed out in a CryptoQuant article, short-term holders appear to have started taking profits. And timing may suggest that this is the cause of the crypto’s latest crash at $ 58,000.

The relevant indicator here is the SOPR or the “Spent Output Profit Ratio” which shows the total amount of profit or loss that the global Bitcoin market is currently harvesting.

The metric judges it by taking the ratio between the purchase price of a part and the price at which it was sold. Values ​​greater than one suggest that investors are selling, on average, at some profit.

For short-term holders, the indicator is changed to include only coins that have been held for less than 155 days before being sold. This new metric is called the SOPR Short Term Holder (or STH-SOPR for short).

The chart below shows the trend in the value of Bitcoin STH-SOPR over the past two weeks.

It seems that the short-term holders have started to realize their profits recently | Source: CryptoQuant

As the chart above shows, the indicator has recently started showing many positive peaks. And today there were two big spikes, as a result of which the price of Bitcoin collapsed to $ 58,000.

Related reading | Break: US regulators explore how to allow banks to hold bitcoin

Here’s another chart, this time for the cash exchange inflow, which shows the total amount of BTC entering the spot exchange wallets:

The value of the indicator shows a significant peak in the last hours | Source: CryptoQuant

As the chart above shows, the influx of spot exchanges also saw a significant spike before the crash, showing that some investors dumped a large amount of Bitcoin at that time.

Related reading | This Reposted Bitcoin Meme Elon Musk Sold As NFT For Almost $ 20,000 In WETH

The post’s analyst believes short-term profit-taking holders and this large influx to spot exchanges (which may or may not be due to STH) could be the signal for the first big profit-taking in the market in a long time. . This may mean that this drop could turn out to be a good buying opportunity.

BTC price

As of this writing, the price of Bitcoin is floating around $ 58.9,000, down 11% over the past seven days. Over the past month, the crypto has gained 36% in value.

The chart below shows the coin’s price trend over the past five days.

BTC price collapses to $ 58,000, but has since rebounded above a bit | Source: BTCUSD on TradingView Featured Image from Unsplash.com, Charts from TradingView.com, CryptoQuant.com

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