The price of Bitcoin has shown a resilient recovery after a recent dip that saw the cryptocurrency trade below the $50,000 mark. The digital asset experienced a significant setback due to a broad decline across global financial markets, attributed to looming fears of a potential recession in the United States among other factors. Despite losing over 16% of its market value, Bitcoin has now rebounded and is hovering around the $60,000 level. Market analysts are offering various conditions that are necessary for Bitcoin to sustain this positive momentum.
An analyst using the pseudonym “tugbachain” on Cryptoquant has provided insights into a crucial metric: the Short-Term Holder Spent Output Profit Ratio (STH SOPR) of Bitcoin. This metric reflects whether investors holding Bitcoin for short periods are selling at a loss or a profit. Specifically, the STH SOPR is used to gauge profitability by showing the profit or loss status of investors who hold assets for less than 155 days. A value below 1 indicates that short-term holders are selling at a loss, while a value of 1 means they break even.
Currently, the STH SOPR for Bitcoin stands above 1, indicating that short-term holders are making a profit. Nonetheless, tugbachain warns that Bitcoin is nearing a significant resistance level at a 1.03 SOPR region, which could prompt these investors to take profits. Such an event might lead to a surge in selling activity, thereby exerting downward pressure on Bitcoin’s price. However, should the market conditions be favorable with high buying activity, the analyst believes Bitcoin could overcome this resistance and continue its ascent.
As of now, Bitcoin is trading at $60,639, marking a modest 1.01% gain over the last day. Despite this, the daily trading volume has decreased by 4.35% and is currently valued at $38.2 billion. According to historical price data, if Bitcoin can break through its current consolidation phase, it may encounter significant resistance between the $67,000 and $70,000 levels. Conversely, if the price dips, the next strong support level lies around the $55,000 mark.
As Bitcoin continues to show signs of recovery, investors and analysts alike are watching closely, speculating on whether it will maintain its bullish momentum or face another downturn amid fluctuating market conditions.
