Bitcoin Price Reaches a ‘Decision Point’ – 4 Metrics To Watch

(CTN News) – Recent analysis has revealed that Bitcoin (BTC $26,443) has reached a “decision point” for price action, but it is now up to speculators to determine the price.

On May 26, Checkmate, lead on-chain analyst at Glassnode, revealed that a Bitcoin price showdown is going to take place in the near future based on findings that were uploaded to Twitter.

“Bitcoin bulls are not doing anything,” warns an analyst in regard to Bitcoin bulls.

The BTC/USD pair is currently struggling near key trend lines and has given an increasing number of long-term market participants cold feet this month as it struggles near key trend lines.

The on-chain analysts are increasingly focusing on short-term holders (STHs) as they try to forecast where the price might go next over the next few months as downside price predictions flow in.

Cointelegraph reported recently that various metrics concerning STHs – defined as entities that hodl coins for 155 days or less – are approaching “reset levels” after a period of exuberance that has begun.

It is possible that this could be a healthy retracement to help Checkmate maintain its bull market in 2023; however, it is equally possible that things could turn ugly at this point.

Bitcoin is currently at a decision point, with the primary lens through which this correction will be viewed being that of Short-Term Holders.

The profitability of STH is being monitored by a number of metrics.

An analysis of STH’s Market Value to Realized Value (STH-MVRV)

Using STH-MVRV, one can compare the value of coins moved by STHs to the value of those coins in proportion to the total Bitcoin market capitalization. In the case of STH coins, 1.0 corresponds to their realized price – the price at which they last moved, or the price at which they achieved breakeven.

A 1.0 reading for STH-MVRV would equate to approximately $26,500 in BTC spot price.

“In bull markets, this level ($26.5k) should provide psychological support. Checkmate commented, “We may be able to trade below it, but a swift recovery would be required in order to justify further upward movement.”.

Spent Output Profit Ratio for Short-Term Holders (STH-SOPR)

As Glassnode describes it, STH-SOPR measures profitability in terms of price sold versus price paid.

Currently below the 1.0 line, it indicates that there is “loss dominance” among STHs, and dip buyers should step in next. In SOPR, the number of outputs spent is the only metric that differentiates between large and small transactions.

“Losses by STH can only be sourced from local top buyers, and contrary to common sense, we want to see top buyers selling the local bottom. The FOMO bounce reaction is the result of this,” explains Checkmate.

Short-term Holder Realized Profit/Loss Ratio, which takes volume into account, is also at risk of flipping bearish. To achieve this, it must spend a “sustained” period below 1.0.

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