New month, new goals! The market and Bitcoin at the forefront, offer us signals which, without reaching heights of euphoria, show a constructive and intriguing dynamic to analyze.
The train seems to have indeed started to leave the platform, and beyond the simple price of BTC, it is the behavior of investors which takes on a new dimension and deserves all our attention in this new optimistic environment! Let's see this together with the data that blockchain offers us.
SOPR: Profit taking in all moderation
Le Spent Output Profit Ratio (SOPR) has held above 1 (1.08 to be precise) in recent days, indicating that investors who sell are generally making profits. Which finally contrasts with the behavior this summer.
However, the increase remains much more moderate than at the last peak when the SOPR reached 1,18suggesting a more mature market, which is not getting carried away.
This relative stability could well mark a simple phase of consolidation:
- Historical past: In the past, a SOPR around 1,08 (as in last December and January) often preceded slight corrections. Conversely, a value of 1,18reached in March, signaled overheating and a local peak.
- February case: A similar pattern of measured profit-taking allowed Bitcoin to climb further, with the market then finding an equilibrium conducive to a further rise.
The key therefore lies in the evolution of demand: if this strengthens with a catalyst like the American elections, the market could maintain its strength.
On the other hand, in the absence of an external driver, consolidation would be likely until new liquidity comes into play.
Short-term holders: An interesting profit dynamic
Analysis of short-term holders (STH) shows frequent profit taking, but in a measured rather than massive way. In general, the STHbeing more sensitive to fluctuations, prefer to secure their gains as soon as the price becomes attractive, which seems to be confirmed here.
Their current activity could lead us to the same conclusion as before: if their profit taking continues to intensify, this could influence the selling pressure, while leaving room for possible consolidation.
Parallels with 2021 for Bitcoin?
Taking a step back, we can note similarities with the year 2021 again thanks to the SOPR. When Bitcoin experienced a double top. That year, the first peak in March was followed by a summer correction, before a strong comeback in the fall.
Today, profit-taking recalls this pattern, with accumulations during declines, followed by gradual resales as the price increases.
Could this herald a similar configuration for this year? I grant you that no one expects this cycle to end next month!
The return of a distribution wave, a sign of growth?
At the same time, the long-term holders (LTH) show signs of a second distribution phase. This transition often marks a surge in demand, where some LTHs take advantage of the high levels to sell, while new investors enter the market.
But who are these LTHs currently distributing? Two groups stand out:
- Summer buyers (July-September): These investors accumulated BTC between $48,000 and $55,000, taking advantage of declines to buy at levels deemed attractive. Their current profit taking represents approximately 15% of supply, which signals notable but measured profit taking.
- Holders for 1 to 3 years: This group acquired their Bitcoin between October 2021 and October 2023, i.e. between the November low (around $15,000) and the $27,000 recovery for the smartest. Their distribution is more modest, with a 9% drop in supply. These investors, having experienced the bearish cycle, could seize this opportunity to reduce their portfolio without depleting their BTC stock.
This redistribution is a positive sign : it demonstrates the solidity of current demand and shows that even former holders see still untapped upside potential in this market.
If this dynamic continues, it could fuel a next bullish phase, where demand could continue to absorb LTH offers without weakening.
Bitcoin: Less available supply, a factor of scarcity
What is particularly striking is the decline in the supply of Bitcoin available on the market. Since January, the liquid supply of BTC has fallen by 9.3%, highlighting increasing scarcity. The less Bitcoin is available, the greater the likelihood of a price rise, especially if demand remains constant or increases.
This context of reduced liquidity could also mean that the arrival of new sources of liquidity, such as ETFs, could have a greater impact on the price than one might think.
Indeed, each BTC purchased in an increasingly illiquid market could cause the price to rise more quickly, further accentuating the attractiveness of this asset for investors.
In short, current signals show a market in an upward phase or even consolidation, but obviously in the short term, where investor caution does not prevent healthy progress.
Profit-taking remains moderate, while long-term holders readjust their positions, allowing the market to breathe. The parallels with 2021 provide an interesting framework, but the path to making this happen remains to be confirmed. Above all, the conditions are met for an upward movement structured according to visible onchain data.
The reduction in supply and the potential provision of new liquidity reinforce this generalized optimism! It remains to be seen whether the coming weeks, with the American elections in their sights, will bring the necessary impetus to reach new levels!
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