Since the beginning of the year, Bitcoin price has not been able to return to its all-time high of $108,230, which has reduced the profitability of short-term holders, putting further downward pressure on the currency.
With demand continuing to decline, BTC prices could continue to fall further. Here’s why.
Short-term Bitcoin holders are calculating losses
According to one report Recently, anonymous crypto analyst Crazzyblockk from CryptoQuant noted a decline in the profitability of BTC investments for short-term holders (less than 155 days).
This analyst evaluated the profitability of all Bitcoin age groups and found that “after Bitcoin rose to $108,000 and then failed to maintain this critical value, the profit margin for these Short-term holders have decreased significantly.
TinTucBitcoin’s assessment of Used Consumer Product Margins of Short-Term Holders confirms the analyst’s view. According to CryptoQuant, the rate has maintained a downward trend since January 2.
Short-Term Holder Used Consumer Product Return Ratio (STH-SOPR) measures the profitability of short-term holders of a given crypto asset. It typically provides insight into whether investors who have held a certain asset for less than 155 days are profitable.
When this value decreases, short-term Bitcoin holders often sell at a loss instead of profit. This reflects a recent decline in market confidence among buyers, suggesting that demand for the leading coin is weakening.
On how this could affect BTC price, Crazyblockk said:
“A decline in the profitability of short-term holders is often a clear signal of weakening market demand and bearish sentiment in the short to medium term. Therefore, under current conditions, this indicates the possibility of a higher price correction due to reduced demand and weak performance.”
BTC Price Prediction: Is a drop to $91,000 imminent?
BTC is currently trading at $100,943. If selling pressure increases as short-term holders face increased losses, the price could drop to $91,488.
However, if sentiment changes and BTC sees a renewed surge in demand, this could push Bitcoin price past $100,000 and towards an all-time high of $108,230.