Bitcoin News Today: Bitcoin's STHs in Loss Mode: A Crucible for Bull Market Renewal

Bitcoin faces a critical juncture as on-chain metrics suggest short-term holders (STHs) are beginning to experience losses, signaling a potential shift in market dynamics. The Spent Output Profit Ratio (SOPR), a key indicator of investor profitability, has fallen below the 1.05 threshold, a sign that many recent buyers are struggling to lock in gains. This development mirrors a similar event in January, when Bitcoin faced a sharp correction amid broader economic uncertainties, including concerns over interest rates and geopolitical risks. Currently, Bitcoin trades around $115,000, down from its recent peak near $124,000, as market participants test key support levels like the 50-day moving average [1].

The SOPR metric is particularly telling in this context. When the SOPR is below 1.05, it indicates that STHs are selling at a loss or breaking even. At present, the SOPR for STHs remains near the neutral 1.00 level, suggesting a holding pattern where recent investors are waiting for a price rebound to generate returns [1]. Analyst Darkfost has highlighted that such conditions often precede major market moves, especially during bull cycles when weaker holders are shaken out, creating opportunities for stronger buyers to accumulate at lower prices [1].

Historically, periods of SOPR decline have been followed by either a short-lived market slowdown or a more robust recovery. In the case of Bitcoin’s 2024 correction, the market rebounded and even broke through previous all-time highs, allowing STHs to return to profitability. Now, with the SOPR dipping below 1.00 again, it remains to be seen whether this trend will lead to another short-lived dip or a more extended consolidation phase. Market observers are watching closely for signs that bulls can absorb the current wave of selling and regain control of the narrative [2].

On the broader market chart, Bitcoin remains above the critical 200-day moving average at $100,339, which analysts view as a key psychological and technical support level. While the 50-day moving average currently sits at $115,712, any sustained breakdown below that level could push the price toward the 100-day moving average at $110,833. A recovery above $123,217, a recent resistance line, could signal renewed bullish momentum and set the stage for a potential push toward the $130,000–$135,000 range [1].

Despite the recent pullback, some on-chain data points offer a cautiously optimistic outlook. The exchange netflow metric, which measures the net movement of Bitcoin between exchanges, has turned more negative in recent days. A negative netflow suggests that more BTC is being withdrawn from exchanges than deposited, a sign that traders are taking profits and holding their positions off-exchange—a behavior typically associated with long-term bullish sentiment [2].

In sum, Bitcoin’s current SOPR reset and the performance of short-term holders are closely intertwined with the broader market structure. While the near-term outlook remains uncertain, the historical precedent suggests that these types of market corrections can create favorable entry points for strategic investors. Whether the current phase will lead to capitulation or a rapid rebound will depend on how effectively bulls can stabilize the price and rekindle buyer interest [1].

Source:

[1] Bitcoin SOPR Shows Potential Entry Zones: Short-Term Holders Face Pressure (https://www.newsbtc.com/bitcoin-news/bitcoin-sopr-shows-potential-entry-zones-short-term-holders-face-pressure/)

[2] Bitcoin STHs Realize Losses for First Time Since January—Impact on BTC Price (https://cryptopotato.com/bitcoin-sths-realize-losses-for-first-time-since-january-impact-on-btc-price/)