Today, I’m introducing two proprietary indicators developed to provide insights into the current profitability of short-term and long-term holders: the Short-Term Holders Profitability Index and the Long-Term Holders Profitability Index, both created under 0nchained Analytics.
1. Short-Term Holders Profitability Index (STHPI): This metric measures the average unrealized profit percentage for short-term holders. Currently, the STHPI stands at 12%, indicating that, on average, this cohort holds an unrealized profit of 12%. Historically, market tops have often coincided with short-term holders experiencing average unrealized losses of 35%, signaling excessive selling pressure.
2. Long-Term Holders Profitability Index (LTHPI): This index tracks the average unrealized profit for long-term holders. At present, the LTHPI reads 67%, suggesting that long-term investors are, on average, sitting on substantial unrealized gains. Historically, significant peaks in the Bitcoin price have occurred when long-term holders’ unrealized profits reached around 90%.
These indicators provide a crucial perspective on market sentiment and holder behavior, helping to gauge potential market tops and shifts in momentum.
Written by onchained
