Key Points
- Bitcoin’s on-chain metrics indicate increased short-term trader activity and unwavering conviction from long-term holders.
- Analysis of spent output metrics suggests that a large price correction is not imminent.
Bitcoin’s on-chain metrics have shown heightened activity from short-term traders selling at a profit.
The cryptocurrency’s price recently surpassed its previous all-time high of $69k, reaching a new peak of $69,990, according to data from TradingView sourced from Binance.
Insights from CryptoQuant Data
CryptoQuant data has revealed intriguing trends in the spent output metrics.
Long-term holders of Bitcoin have not significantly sold off their holdings in the past month, suggesting that a major price correction is unlikely.
CryptoQuant analysts have examined Bitcoin’s bull and bear trends since January 2018 using the adjusted Spent Output Profit Ratio (aSOPR) metric.
This metric, which excludes UTXOs with an input-output span of less than an hour, provides a clearer picture of Bitcoin holders’ actions by filtering out short-lived trading activity.
Long-Term Holders and Market Trends
The analysis indicates that growth periods, when the aSOPR is above 1, typically last 235 days.
Currently, we are 140 days into the cycle, suggesting that Bitcoin could find a local top in the next 100-150 days.
While this prediction is not guaranteed, it is worth further examination.
The aSOPR findings, combined with spent output age bands, provide insight into whether short-term and long-term holders are selling.
It was observed that long-term holders saw a spike in spent outputs in mid-January, followed by a price correction for Bitcoin from $49k to $38.5k.
However, not every increase in spent output results in an immediate price reaction.
In the past six weeks, the 18-month and older bands did not see much spent output activity, but the aSOPR has trended higher, indicating that short-term traders were selling at a profit.
Despite this, a major price correction like that seen in mid-January is not anticipated at this time.
Santiment data on the Weighted Sentiment showed strong positivity around Bitcoin in the past two weeks, likely due to its proximity to all-time highs.
However, the downtrend on the mean coin age suggests a distribution phase is in progress throughout the network.
The declining mean coin age, coupled with the rising aSOPR, points once again to short-term holders selling at a profit.
However, as these coins are likely younger, based on the spent output age bands, investors need not fear a large price correction.
