- BTC’s next bull run could happen if short-term holders spend less and accumulate more.
- The last days were marked by the exit of the “weak hands”.
According to CryptoQuant analyst pseudonym Crazzy blockk, an assessment of key on-chain metrics suggested that short-term Bitcoin [BTC] Holders could be instrumental in driving the next bull run for the king coin if they continue to accumulate and spend less.
To reach this conclusion, the analyst looked at Outgoing Spent Profit Ratio (SOPR), Adjusted Outgoing Profit Spent Ratio (aSOPR) and Outgoing Transactions Spent Output (UTXO).
According to the SOPR, ASOPR and STH-SOPR metrics, short holders are spending their profits. This has led to an increase in BTC accumulation and a decrease in selling pressure in recent weeks, Crazzy block found.
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He further opined:
“Over the next few months, if short holders are interested in accumulating and entering this level and are not interested in selling to bullish exchanges, it will be a bullish sign for Bitcoin. These factors typically lead to short-term holders becoming long-term holders, consistent with past bitcoin price cycles.”
Source: CryptoQuant
Capitulation is the word of the day
On February 24, it was mentionted that in January 2023, the annual increase in the personal consumption price index (PCE) in the United States accelerated to 5.4%, from a revised increase of 5.3% in the previous month.
Prices of goods rose 4.7%, up from 5.1% in December, while prices of services rose 5.7%, up from 5.4%.
The PCE index rose 5.4% year-on-year in January 2023, indicating that prices for goods and services have risen, which could lead to a decline in consumer purchasing power.
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Following the announcement, BTC short traders began selling their holdings as a precaution against possible losses if the price of BTC fell significantly. According to data from CoinMarketCap, the price of BTC has since fallen by 3%.
According to CryptoQuant analyst JayBot:
“Perhaps, Bitcoin can continue to rise after overcoming the selling of short holders.”
Source: CryptoQuant
Further, an assessment of BTC’s Network Profit/Loss (NPL) ratio confirmed increased selling by “weak hands” in recent days. According to data from SentimentBTC’s NPL suffered a significant drop on February 25th.
Metric declines in NPLs are often associated with short periods of capitulation by “weak hands” and resurgence of “smart money” in the market.
As a result, these declines are usually accompanied by local rebounds and price recovery phases. In the last 24 hours, the value of BTC has climbed by 0.4%.
Source: Santiment