Bitcoin (BTC) has reached a “decision point” for price action, but speculators are in charge, a new analysis says.
in the conclusions published Taking to Twitter on May 26, Checkmate, chief analyst at Glassnode, revealed that a BTC price showdown was brewing.
Analyst Warns Bitcoin Bulls “Aren’t Doing Anything”
Struggling near key trend lines, the BTC/USD pair is giving an increasing number of longtime market participants cold feet this month.
As downward price predictions flow, the attention of on-chain analysts is increasingly turning to short-term holders (STHs) when it comes to where the price might go next.
As Cointelegraph reported, several metrics specifically covering STHs – defined as entities that store coins for 155 days or less – are approaching “reset levels” after a period of exuberance.
For Checkmate, this could be a healthy pullback needed for the continuation of the 2023 bull market; but still, things could get ugly now.
“Bitcoin is currently at a decision point, with short-term holders being the primary lens for viewing this correction,” he summarized.
Several metrics covering short-term holder profitability are in the spotlight.
STH market value to realized value (STH-MVRV)
The STH-MVRV measures the value of coins moved by holders in the short term compared to the value of those coins as part of the total Bitcoin market capitalization. When it is at 1.0, it corresponds to the short-term holders’ realized price, which is the aggregate price at which the short-term holders’ currencies last moved, their breakeven point.
STH-MVRV is currently at 1.022, so a reading of 1.0 equates to a BTC spot price of about $26,500.
“In bull markets, this level ($26,500) should offer strong psychological support. We can trade below it, but a quick recovery would be needed to justify a continuation higher,” Checkmate commented.
Short-term holder spent output profit ratio (STH-SOPR)
STH-SOPR, as described by Glassnode, is a “price sold vs. price paid” metric that measures the profitability of spent products.
Currently below the 1.0 line, it suggests “loss dominance” among short-term holders and calls for dip buyers to step in next. The SOPR metric does not distinguish between large and small operations, and focuses exclusively on the number of outputs spent.
“Short-term holders’ losses can ONLY come from local blue chip buyers, and counterintuitively, we want to see blue chip buyers selling the local fund. This is what creates the FOMO bounce reaction,” Checkmate explains.
Similarly, the short-term holder realized profit/loss ratio – the version of the SOPR that takes volume into account – risks turning bearish. However, for this to occur, it would have to spend a “sustained” time below 1.0.
Short-Term Holder Realized Profit/Loss Ratio Momentum
Lastly, the trend back to “neutral” territory is also visible in the metric, which alerts observers to sudden trend changes when it comes to STH profitability.
Momentum is rolling back from its “green” phase, which has been in place since January 2023, the start of Bitcoin’s price recovery.
“STH Profit/Loss momentum is a tool designed to detect rapid changes in the market regime and trend. It is extremely sensitive, and has returned to neutral gear,” the publication added.
“If this starts to turn red, it would be an early sign that a deeper correction is in play. It has consistently signaled the trend reversal, often before the first breakout even occurs.”
To conclude, Checkmate called on hodlers – currently inactive and reluctant to spend coins – to intervene.
“The bulls have to push themselves if they want higher prices,” he wrote.
“HODLers certainly do, but they’re not doing anything with their coins. We have coin inactivity near all-time highs.”
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