Key Points
- Bitcoin’s Spent Output Profit Ratio (SOPR) for short-term holders has risen above 1, implying these investors are now profiting.
- Bitcoin’s futures open interest has reached a two-month high, with derivatives volume increasing by 112% in the last 24 hours.
Bitcoin’s short-term holders are now in a profitable position, as indicated by the Spent Output Profit Ratio (SOPR) for this group, which has risen above 1.
CryptoQuant analyst Phi Deltalytics observed in a recent report that this increase in the SOPR value above 1 indicates a bullish sentiment in the market.
Understanding the SOPR
The STH-SOPR measures whether investors holding the coin for three to six months are selling at a profit or loss. A value above 1 suggests that these short-term holders are selling their coins profitably, while a value below 1 indicates they are selling at a loss.
The SOPR for Bitcoin’s short-term holders was 1.019 at the time of the report. Prior to this, the metric had dipped to the 1 level but did not fall below it.
Market Impact
Deltalytics noted that when the SOPR hit 1, it indicated a neutral trading price, causing many market participants to retain their coins rather than sell them. This resulted in low selling pressure, a positive sign for the market.
For the market to “absorb” any profit-taking by sellers without risking a significant price drop, the STH-SOPR must remain above 1. This could potentially aid in sustaining Bitcoin’s current price rally.
Bitcoin has seen a significant increase in trading activity in its derivatives market, with the volume rising by 112% in the past 24 hours. The futures open interest for Bitcoin is now at its highest level since March, standing at $35 billion at the time of writing.
Bitcoin was trading at $71,212 at the time of the report, having grown 6% in the past 24 hours.
For those interested in their Bitcoin profits, a BTC Profit Calculator is available for use.
