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In the past week, Bitcoin has grabbed the major headlines as prices surge to a new all-time high of $118,856 following a market gain of 9.77%. In remarkable fashion, the premier cryptocurrency added an estimated $10,000 to its market value increasing its market cap to a solid $2.34 trillion. Interestingly, recent on-chain data suggest there may be more tailwind ahead backing Bitcoin’s ability to explore new price territory.
STH SOPR Sits At 1.02, Suggests Market Not Overheating
In a recent quicktake post on CryptoQuant, a market analyst with username CryptoMe has shared some compelling insights on Bitcoin’s price trajectory amidst current market euphoria. As earlier stated, the flagship cryptocurrency experienced a significant price gain to brush nearly against the $120,000 mark.
Despite this rise, CryptoMe notes that short-term holders’ spent output profit ratio (STH SOPR) indicates that this class of investors are yet to engage in significant profit-taking. For context, The STH-SOPR measures the ratio of realized profits or losses by investors who’ve held BTC for less than 155 days.
A STH-SOPR reading above 1.0 indicates that BTC are being sold at a profit, while values below 1.0 indicate losses. Based on the chart below, sharp increases in this on-chain metric especially into the 1.05-1.20+ range (red zone) have correlated with profit-taking phases and can often precede local tops.
Source: CryptoQuant
However, the STH-SOPR currently sits at 1.02, suggesting that although some short-term holders are in profit, no aggressive market distribution has commenced. This development is particularly bullish considering the STH realized price is presently at $100,000 indicating these investors are 17%-18% in profit and are opting to hold for further price gains.
Meanwhile, the analyst notes that this present on-chain situation aligns with the broader sentiment in the derivatives market. Open Interest is climbing, signaling growing participation, but funding rates remain neutral to slightly positive. This lack of extreme funding imbalances suggests that traders are not flooding the market with overleveraged long positions due to FOMO.
CryptoMe explains that all these factors indicate the Bitcoin market is far from overheating and there is still potential for more growth ahead.
BTC Price Overview
At the time of writing, Bitcoin is trading at $117,840 indicating a 3.40% in the past day but a slight 0.82% decline from the present all-time high. Meanwhile, the asset’s daily trading volume is up by 96.53% indicating a strong market activity behind the ongoing rally backing the potential for a continuation.
BTC trading at $117,646 on the daily chart | Source: BTCUSDT chart on Tradingview.com
Featured image from Pexels, chart from Tradingview
Semilore Faleti is a cryptocurrency writer specialized in the field of journalism and content creation. While he started out writing on several subjects, Semilore soon found a knack for cracking down on the complexities and intricacies in the intriguing world of blockchains and cryptocurrency.
Semilore is drawn to the efficiency of digital assets in terms of storing, and transferring value. He is a staunch advocate for the adoption of cryptocurrency as he believes it can improve the digitalization and transparency of the existing financial systems.
In two years of active crypto writing, Semilore has covered multiple aspects of the digital asset space including blockchains, decentralized finance (DeFi), staking, non-fungible tokens (NFT), regulations and network upgrades among others.
In his early years, Semilore honed his skills as a content writer, curating educational articles that catered to a wide audience. His pieces were particularly valuable for individuals new to the crypto space, offering insightful explanations that demystified the world of digital currencies.
Semilore also curated pieces for veteran crypto users ensuring they were up to date with the latest blockchains, decentralized applications and network updates. This foundation in educational writing has continued to inform his work, ensuring that his current work remains accessible, accurate and informative.
Currently at NewsBTC, Semilore is dedicated to reporting the latest news on cryptocurrency price action, on-chain developments and whale activity. He also covers the latest token analysis and price predictions by top market experts thus providing readers with potentially insightful and actionable information.
Through his meticulous research and engaging writing style,
