As the Bitcoin price continues to hover around $30,000, market researchers are warning that speculators may start selling if the price advances beyond $33,000. In the latest edition of Glassnode’s weekly newsletter, “The Week On-Chain,” the analytics firm highlighted the potential for a market correction due to speculative selling risk. With short-term holders (STHs) increasing their role in the market and forming wider support near $26,000, the opposing effect of selling pressure may become apparent in the near future.
The newsletter utilized the market value to realized value (MVRV) metric, which measures profitability or loss by comparing the spot value of coins to the price at which they last moved. The MVRV ratio currently sits at 1.12, meaning that short-term holder cohort’s average profit is around 12%. If the Bitcoin price continues to climb, the STH-MVRV will rise with it, and once it surpasses 1.2, the risk of profit-taking becomes more likely, according to historical data.
On the other hand, data from the Spent Output Profit Ratio (SOPR) suggests that recent lows near $25,000 have exhausted sellers. The SOPR metric studies the relative profitability of Bitcoin moving on-chain and has shown “exhaustion” multiple times near the $25,000 level. This indicates that those looking to sell have been mostly flushed out, resulting in an increase in buyer interest and a potential bounce back above $30,000.
As the Bitcoin market continues to evolve and adapt to new conditions, it is crucial for investors to keep an eye on these indicators. While it’s hard to predict the precise movements of any market, understanding the underlying metrics and potential risks can help make more informed decisions.
In conclusion, the current BTC market seems to be at a critical juncture where both investors and speculators are watching the $33,000 level cautiously, as it may trigger a market correction due to profit-taking. On the other hand, the exhaustion of sellers near $25,000 may strengthen buyers’ resolve, resulting in the potential recovery of the market. As always, it is essential for investors to conduct their thorough research and consider all factors before making any decisions in the ever-evolving crypto market.
Source: Cointelegraph
