Bitcoin: Long-Term vs. Short-Term Ownership Battle Heats Up; BTC caught in the middle

by James · May 13, 2023

Bitcoin selling pressure increased as short-term holders saw profits.
MVRV ratio indicated that long-term owners cannot sell.

Over the past month, Bitcoins have [BTC] the price fell after reaching the $30,000 mark. As many short-term traders took advantage of this price correction and started accumulating BTC after prices fell.

Read Bitcoins [BTC] Price prediction 2023-2024

BTC under pressure

But over time, these short-term traders saw profits. In accordance Glassnode’s data, most short-term holders started to see profits after BTC’s price crossed $25,200. At press time, BTC’s price was $26,765.18, according to CoinMarketCap.

This indicated that many short-term holders were already profitable. This increase in profits could motivate these holders to sell their holdings and push down the price of Bitcoin.

Interesting behavior was also observed by other non-profitable traders. According to SOPR (Spent Output Profit Ratio), many addresses sold their BTC at a loss when SOPR reached below 1.

SOPR is a tool that measures whether Bitcoin holders are selling at a profit or a loss. During market corrections, some Bitcoin holders who bought near the top may panic and sell their coins at lower prices, resulting in realized losses. SOPR tracks this behavior and can help identify potential bottoms in the market.

When the SOPR falls below 1, it indicates that more coins are being sold at a loss than at a profit. This could signal a potential bottom in the market, as most sellers who bought near the top have now exited their positions.

Source: Glassnode

However, the same selling pressure faced by short-term holders was not seen by addresses that have held their BTC for a longer period of time. According to Santiment’s data, the MVRV ratio had decreased significantly in recent weeks.

This indicated that BTC was no longer in an overbought position and long-term holders had little incentive to sell their holdings.

Source: Sentiment

Is your portfolio green? Check out the Bitcoin Profit Calculator

Tricks of the trade

Despite these positive factors, traders remained bearish on BTC. According to Coinglass, the number of short positions taken against BTC increased significantly. Over the past few days, the proportion of all short positions taken has increased from 50 to 52%.

Only time will tell if the traders prove to be right in the long run.