Bitcoin at Critical Juncture: STH-SOPR Metric Signals Potential Shift in Momentum

Bitcoin's STH-SOPR Metric Nears Breakeven Point

Bitcoin (BTC) is at a pivotal moment as its Short-Term Holder Spent Output Profit Ratio (STH-SOPR) approaches the breakeven level of 1.0. This metric, which measures the ratio of the price sold to the price paid for BTC held for less than 155 days, is a critical indicator of short-term profitability trends.

Historically, when Bitcoin's STH-SOPR (7-day moving average) breaks above 1.0, it signals a positive shift in momentum and profitability. However, failure to sustain above this level often leads to renewed sell pressure. The last attempt in early January succeeded but was short-lived, highlighting the volatility and uncertainty in the market.

Current Indicators Signal Caution

Glassnode's analysis reveals that Bitcoin's STH-SOPR Multiple, which compares short-term profitability trends, is currently in the red zone. This suggests that short-term holders (STHs) have been realizing more losses recently, indicating negative momentum. Combining this with the struggling STH-SOPR near breakeven level, the probability of rejection at 1.0 appears elevated.

Market Volatility and Economic Data

At press time, Bitcoin's price had dipped 0.15% over the past 24 hours, trading at $95,809, extending its recent sell-off. The broader crypto market remains under pressure due to profit-taking and macroeconomic concerns, exacerbated by the aftermath of the Bybit hack.

Investors are bracing for a packed week of key economic data releases, including the U.S. GDP growth rate on Thursday and the personal consumption expenditure (PCE) index on Friday. The PCE, a key inflation gauge favored by the Federal Reserve, could significantly influence future rate-cut decisions. Markets currently interpret signals as suggesting the Fed may keep interest rates unchanged, possibly until summer.

Outlook for Bitcoin's Next Move

If Bitcoin's STH-SOPR breaks above 1.0, it would signal a positive shift in profitability and momentum. Conversely, failure to breach this level could intensify sell pressure. With critical economic data on the horizon, the next few days will be pivotal for Bitcoin's trajectory.