Leading cryptocurrency Bitcoin has witnessed heightened volatility this week, marked by sharp price swings and fresh record highs. Just yesterday, the coin surged to a new all-time high of $123,731 before retreating. Now trading at $119,937, the asset has pulled back by roughly 4% from its peak.
However, despite these fluctuations, on-chain data has revealed a holding pattern among Bitcoin’s short-term holders (STHs). This could help drive another upward push for the coin in the short term.
Short-Term Holders Could Be Fuel for Bitcoin’s Next Rally
BTC STHs (investors who have held their coins for 155 days or less) have reduced their selloffs and gradually fallen into an accumulation pattern even as the market’s volatility climbs.
This is reflected by the coin’s STH Spent Output Profit Ratio (STH-SOPR) metric, which briefly dipped below the neutral line but has rebounded, per Glassnode.
The STH-SOPR metric measures whether coins moved by STHs are being sold at a profit or a loss. When it stays above the neutral one level, STHs sell at a profit, signaling strong market sentiment. On the other hand, when it drops below one, these investors are distributing their coins at a loss.
The movement of BTC’s STH-SOPR above the neutral line is noteworthy because STHs are among the most influential participants in BTC’s price movements. With their cost bases often close to the current market price, STHs are usually the first to react to swings. They worsen selloffs during downturns or improve rallies when they hold or accumulate.
Therefore, their decision to revert to a holding pattern, despite sharp price fluctuations, reflects a degree of conviction that can help stabilize the market.
Bitcoin’s Aggressive Buyers Absorb Sell Pressure
Bitcoin’s taker-buy/sell ratio has climbed to a monthly high of 1.16, confirming the bullish tilt in sentiment among derivatives traders.
The ratio measures the balance between market buy orders and sell orders on futures and perpetual contracts. A value above one means that more trades are executed at the ask price (market buys) than at the bid price (market sells), signaling stronger buyer aggression.
BTC’s current taker-buy/sell ratio means buyers in its derivatives market are actively absorbing sell-side liquidity. This shows growing demand and highlights strengthening conviction, which could drive a rebound.
$122,000 Breakout or Drop to $115,000?
If these trends persist, the king coin BTC could be back on track to retest the $122,000 level in the near term. A breach of the resistance at $122,190 could trigger a rebound toward its all-time high of $123,731.
However, if volatility strengthens and bullish conviction weakens, sell-side pressure could increase, causing a price drop to $115,892.
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