Bitcoin (BTC) investors were in a frenzy as the market dropped below $70,000, recent data shows. According to information from onchain analytics company Glassnode, short-term holders (STHs) sold off 54,000 BTC on October 31st – the highest amount since April.
The profits of STHs are dwindling as the price of BTC begins to decline. Traders looking to capitalize on opportunities quickly became anxious as BTC/USD shifted away from its near all-time highs this week. Glassnode, which monitors the transfer volumes from STH entities to exchanges, reported that on October 31st alone, 54,352 BTC (equivalent to $3.76 billion) were sent in inbound exchange transactions.
STHs are wallets that hold 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 volatility often triggers the STH cohort, and Glassnode indicates that their overall profit margin is rapidly diminishing, likely increasing the pressure to sell.
The STH spent output profit ratio (SOPR), which measures this, is currently below 1.01, with 1 representing the breakeven point. Just two days prior, on October 29th, it was close to 1.04. Glassnode also reveals that a significant portion of the coins sent to exchanges on October 31st were from STH entities experiencing losses.
Bitcoin faces the risk of exceeding $70,000, as exchange order book liquidity data from CoinGlass suggests that the next significant area of interest is around $68,000. Ask liquidity has returned to levels between the current market price and the all-time highs.
Following the recent market movements, traders had mixed opinions on their implications. While some cautioned that surpassing $73,000 could be a “deviation,” others argued that the behavior of the BTC price is reminiscent of previous halving years. “Derisking before the election 5-6 days in advance occurred in both 2020 and 2016,” mentioned popular X account HornHair to followers.
As the week’s crucial United States macroeconomic report in the form of nonfarm payrolls data is set to be released on November 1st, risk-asset traders are closely monitoring the situation.
This article does not offer investment advice or recommendations. All investment and trading decisions involve risks, and readers are advised to conduct their own research before making any decisions.