Bitcoin investors appear to show signs of concern as the cryptocurrency’s price falls below $70,000, leading to an increased amount of coins being moved onto exchanges. On-chain data analytics firm Glassnode reported that short-term holders, or STHs, transferred 54,000 BTC on October 31, marking the largest amount since April.
As Bitcoin’s price took a downturn from near its all-time high, many STHs seemed to lose their nerve. Glassnode, which monitors the movement of cryptocurrency volumes from STHs to exchanges, uncovered that over 54,352 BTC, valued around $3.76 billion, were sent in inbound exchange transactions on October 31.
STHs are those who hold onto their Bitcoin for up to 155 days and are usually observed to be reactionary in their trading behavior. This behavior contrasts with long-term holders who often leave their funds untouched in their wallets despite market fluctuations. In light of Bitcoin’s recent volatility, Glassnode found that the overall profit margin of STHs is rapidly decreasing, which is probably intensifying the urgency to sell.
Through tracking the STH spent output profit ratio (SOPR), an indicator which represents the STH profit margin, Glassnode found that the current SOPR is less than 1.01, with 1 indicating the breakeven point. It sat at nearly 1.04 on October 29. Glassnode also revealed a significant portion of the coins transferred to exchanges on October 31 were from STHs who were operating at a loss.
Investor sentiment concerning Bitcoin’s future value appears to be divided. Observing the current trends, some traders suggest the cryptocurrency’s trip past $73,000 might be a temporary “deviation.” However, others believe that Bitcoin’s price pattern is merely imitating prior halving years. Meanwhile, exchange order book liquidity data from CoinGlass indicates the next region of interest lies around $68,000 with ask liquidity returning between the current market price and the all-time highs.