Bitcoin (BTC) investors grew anxious as the market dropped below $70,000, recent data reveals. Information from onchain analytics company Glassnode indicates that short-term holders (STHs) sold off 54,000 BTC on October 31 — the largest amount since April.
STH profits are dwindling as the price of BTC gives back its gains. Quick-thinking Bitcoin traders became unsettled as BTC/USD changed course from its near all-time highs this week. Glassnode, which monitors the movement of funds from STH entities to exchanges, reported that on October 31 alone, 54,352 BTC (equivalent to $3.76 billion) were sent in inbound exchange transactions.
STHs are wallets holding a specific amount of BTC for up to 155 days. They typically engage in reactionary trading, unlike long-term holders (LTHs) who may keep their funds untouched in wallets for extended periods. Price fluctuations often trigger the STH group, and Glassnode data indicates that their overall profit margin is rapidly declining, potentially pushing them to sell in a hurry.
The STH spent output profit ratio (SOPR), which quantifies this data, currently stands at less than 1.01, with 1 representing the breakeven point. Just two days earlier, on October 29, it was nearly 1.04. Furthermore, Glassnode reveals that a considerable amount of the coins transferred to exchanges on October 31 were from STH entities facing losses.
Bitcoin faces the risk of surpassing $70,000. Exchange order book liquidity data from monitoring platform CoinGlass suggests that the next significant level of interest is around $68,000. Ask liquidity has settled between the current market price and the all-time highs.
Traders have mixed opinions on the recent market movements. While some caution that the surge past $73,000 could be a temporary “deviation,” others believe that the behavior of BTC price mirrors patterns seen in previous halving years. Popular analyst HornHair stressed the trend of reducing risk in the lead-up to elections, citing occurrences in both 2020 and 2016.
As the week’s crucial United States macroeconomic report, nonfarm payrolls data, is set to release on November 1, risk-asset traders are closely monitoring the situation. This article does not provide investment advice. It is essential for readers to conduct their research and analysis before making any investment or trading decisions.