Bitcoin Short-Term Holders (STH) in profits are holding tight onto their holdings, while the STH at a loss are selling their BTC. As Bitcoin recovers from $112K, Bitcoin onchain analysis suite, Checkonchain, stated that profit taking among STH has reduced drastically.
Checkonchain stated, “Many recent top buyers and ‘Weaker’ hands are selling around their buy-in price and saying “get me out”. Aligning with this idea, the Bitcoin STH Spent Output Profit Ratio (SOPR), which shows the recent buyers who bought near all-time highs, who are at loss, are selling more than those recent buyers in profit.
On the weekly chart, Bitcoin fell below the $116K support level and entered into a low liquidity zone. Bitcoin (BTC) was trading at $118.6K, when the markets opened for trading this week. However, with the bulls starting to take profits by selling the top, the cryptocurrency lost its demand and started crashing.
However, Checkonchain, stated, “What we want to see from here is a short, sharp dip into the [red] zone (to flush out the weak hands), and then see a nice bump back to the [green] zone. This confirms the bull trend is still in play. The last time this happened was when we dipped under 100k in June. Didn’t last long.”
Based on the technical analysis of the chart, Bitcoin is currently trading within a bullish falling wedge pattern. In such formations, the price typically moves in a zigzag manner between the upper and lower trendlines. BTC may keep moving up and down in this range for a while because the wedge hasn’t fully formed yet. But if Bitcoin breaks out, it could go up to $120,000. This prediction is based on the traditional breakout theory, which says that the price target can be found by measuring the height of the wedge at its widest point.
