Key Points
- Bitcoin’s short-term holders are selling their coins at a high profit, indicating a possible market correction.
- However, Bitcoin’s Funding Rate, Premium and Open Interest suggest a potential peak of $160k if a rebound occurs.
Bitcoin’s short-term holders continue to sell their coins at a substantial profit, suggesting a market correction may be on the horizon.
However, the Funding Rate, Premium, and Open Interest for 2024 hint at a potential peak of $160k for Bitcoin if a rebound occurs.
Impact of Short-Term Holders
The Spent Output Profit Ratio (SOPR) for Bitcoin short-term holders is high, indicating these holders are selling at a profit, often coinciding with price peaks.
However, if the SOPR falls below 1, it signifies selling at a loss, usually corresponding to price corrections or market declines.
This consistent profit-taking by short-term holders could indicate potential market adjustments.
If demand decreases while profit-taking remains high, the price could face downward pressure, leading to corrections.
Conversely, if SOPR values show losses and continue to decline, it may signal reduced selling pressure, allowing Bitcoin to find stability or support levels, potentially around $90K.
NAV Premium and MACD Signals
In addition, the NAV Premium for short-term holders has dropped to 11.8% from levels above 30%, further supporting the anticipated price correction.
Previous patterns showed that when the NAV Premium approached zero, a decrease in selling activity was evident.
This suggested that holders were likely to retain their assets, expecting improved market conditions.
The current value suggests a potential decrease in selling pressure if it drops below zero, which could support Bitcoin’s price if the trend follows historical patterns.
The MACD has shown bearish crossovers at high levels, historically correlating with price corrections.
Bitcoin’s price has peaked near historical resistance levels, aligning with the bearish signals.
Bitcoin’s Open Interest (OI) appears to be retracing to a supportive trendline, suggesting potential stabilization or a rebound in its price.
This movement mirrors a previous correction pattern, which, if repeated, could drive Bitcoin’s price towards the $160K mark in Q1 of 2025.
The Funding Rate, Premium, and OI are historically similar to those seen during the earlier correction.
The Realized Profit/Loss Ratio and the Short-Term Holder Realized Price, currently at $86K, hint at key levels where sentiment could shift, potentially dampening further corrections and reinforcing the trajectory towards $160K.
This analytical perspective, based on historical patterns and current on-chain metrics, provides a cautiously optimistic outlook for Bitcoin’s near-term movement.