On-chain data shows that short-term Bitcoin holder SOPR is approaching the “steal” value that has served as resistance to the price of the cryptocurrency in the past. As one analyst noted in a CryptoQuant post, if their SOPR continues to rise, the selling pressure on short holders will increase. The Issue Spent Profit Ratio (or SOPR for short) is an indicator that tells us whether the overall Bitcoin market is currently trading at a profit or a loss. This indicator works based on the chain history of each coin to see what price each coin sold for previously. If the previous value of any currency is lower than the current price, that currency has now moved into profit. If the price of the last sale is lower than the last, the sale of the coin will result in a loss. A SOPR value of more than one means that the overall market is currently trading at a profit.
On the other hand, values below the threshold indicate that the average investor is moving bitcoins into a loss. Now, “short-term holders” (STH) include all Bitcoin investors who hold their coins for less than 155 days. The graph below shows the SOPR trend. As you can see in the chart above, Bitcoin’s STH SOPR fell below “1” a few months ago, indicating that these holders are selling at a loss. The reason for this trend is that the “SOPR = 1” line represents the market’s “breakeven” point. When this indicator reaches this level, investors who previously had losses now feel that they have “recovered” their money and therefore sell their coins here. This leads to regular STH selling pressure in this sign, which creates resistance in the price of Bitcoin. Recently, the SOPR for this group of owners has increased and is now approaching the threshold again. If past trends are anything to go by, this time around, Bitcoin may see a decline after testing its value.