Bitcoin – How and why short-term holders can push BTC to $75,000
Bitcoin (BTC) was trading at $68,388 at press time after 9% gains within just seven days. On 18 October, Bitcoin hit a two-month high above $68,900, strengthening the market’s optimism for further gains.
Several factors aligned together can support Bitcoin’s rally to an ATH. These include the market pricing in the outcome of the U.S elections and high inflows to Spot Bitcoin exchange-traded funds (ETFs).
However, short-term holders remain the key to how long Bitcoin will take to reach record highs. Consider this – After Bitcoin spiked to a two-month high, on-chain metrics showed that this cohort started selling.
Analyzing short-term holder behavior
Data from CryptoQuant revealed an increase in Bitcoin exchange inflows from traders who held Bitcoin for between one and three months. The exchange inflow Spent Output Age Bands for this cohort jumped to a weekly high as BTC approached $69,000 on the charts.
This spike can be seen as a sign of profit-taking behavior as short-term traders look to capitalize on the favorable market conditions.
The short-term holder Spent Output Profit Ratio further highlighted that these traders have been selling BTC at a profit. Especially since the metric has been above 1 for over a week now.
While an SOPR ratio above 1 suggests that the general market sentiment is positive, it could also mean a high likelihood of profit-taking. If Bitcoin’s uptrend shows signs of weakness, this cohort will likely start selling more, causing a price reversal.
Besides short-term holders, the other group that could delay a Bitcoin ATH are the 1.9M addresses that bought BTC between $66,900 and $69,200. According to IntoTheBlock, these addresses, at press time, were at a break-even point.
Bitcoin is bound to face resistance as it approaches $69,000 as these addresses might start selling once they turn in a profit.