- Bitcoin is seeing promising gains as the CPI index favors cryptocurrencies.
- Short-term holders face challenges given Bitcoin’s continued volatility.
Amid Bitcoin’s value roller coaster ride, the Consumer Price Index (CPI) appeared to agree with it and certain other cryptocurrencies, leading to some promising gains.
However, this hopeful trend was quickly shattered by the widespread rumor that the United States was shedding Bitcoin, partially wiping out the gains made.
Given the sustained volatility Bitcoin has experienced, those holding their investments short-term have found themselves in a precarious position and may have faced some upcoming challenges.
Read Bitcoin (BTC) Price Prediction 2023-24
Bitcoin SOPR decreases
March 18 marked the peak of the latest Bitcoin SOPR (Spent Output Profit Ratio) index, hitting an impressive 1.07. The index remained consistently high over the period that followed, suggesting that short-term investors who held their coins for less than six months, on average, achieved notable profitability.
The short-term SOPR metric focused on coins held for a period between one hour and less than 155 days. It provided insights into the profitability of trading between investors who previously held their coins.
Source: CryptoQuant
However, the current state of affairs paints a different picture. As of this writing, the short-term SOPR index has dipped below the critical threshold of 1 and settled at 0.99, according to CryptoQuant data.
This decline meant a shift in the price of bitcoin, accompanied by short-term investors realizing their gains. Consequently, what was once an average gain or neutral position had turned into actual losses for these investors.
Bitcoin cost basis means little rest
Despite Bitcoin’s recent price drop, Glassnode’s data offered some comfort to short-term holders. The cost base metric showed an encouraging trend in the short-term realized price, which continued to climb higher.
The chart showed a significant upward adjustment of the short-term holder cost basis in recent months. It also showed that the average purchase price of short-term holders is approaching the current spot price.
The short-term realized price of bitcoin is used as a metric to measure the average purchase price of bitcoin recently sold or transferred over a short period of time.
It shows the average profit or loss of coins held over a relatively short period of time. If Bitcoin’s short-term realized price increases, it means that recent buyers are selling their coins for a profit. This uptrend could indicate a bullish market or the realization of profits by traders who have recently made investments.
Slight BTC overvaluation on MVRV ratio
According to the Bitcoin 90-Day Market Value to Realized Value (MVRV) ratio provided by Santiment, BTC was still slightly overvalued.
The metric showed that BTC remained above the zero line at the time of the current update, hovering around 1.4%. This suggests that despite the prevailing downtrend, holders still maintained their positions at a modest profit during this period.
Source: Santiment
How much is 1.10.100 BTC worth today?
While BTC has faced challenges lately, short-term holders haven’t found themselves in an entirely unfavorable position. A slight price increase would further improve their profitability.
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