Bitcoin Like A Spring Waiting To Uncoil, Analyst Explains Why


An
on-chain
analyst
has
explained
how
Bitcoin
is
sitting
like
a
coiled
spring
right
now,
a
state
the
asset
doesn’t
usually
stay
in
for
too
long.

Bitcoin
Short-Term
Holder
Sell-Side
Risk
Ratio
Has
Declined
Recently

In
a
new

post
on
X,
analyst
Checkmate
has
discussed
the
recent
trend
occurring
in
the
Sell-Side
Risk
Ratio
for
the
Bitcoin
short-term
holders.
The

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Sell-Side
Risk
Ratio
here
refers
to
an
indicator
that
tells
us
about
how
the
absolute
profit
and
loss
being
locked
in
by
the
investors
compares
against
the
BTC
Realized
Cap.

The

Realized
Cap
is
basically
a
measure
of
the
total
amount
of
capital
that
holders
as
a
whole
have
used
to
purchase
their
coins,
as
determined
by
on-chain
data.


Related
Reading

Thus,
the
Sell-Side
Risk
Ratio,
which
takes
the
ratio
between
the
sum
of
profit
and
loss
with
this
initial
investment,
provides
info
about
how
the
profit
or
loss-taking
from
the
investors
looks
like
relative
to
their
cost
basis.
When
the
value
of
the
indicator
is
high,
it
means
the
holders
are
realizing
a
large
profit
or
loss
right
now.
Such
a
trend
may
follow
some
sharp
volatility
in
the
asset’s
price.

On
the
other
hand,
the
metric
being
low
implies
that
investors
are
only
selling
coins
close
to
their
break-even
level.
This
kind
of
trend
could
suggest
profit
or
loss-takers
in
the
market
have
become
exhausted.

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In
the
context
of
the
current
topic,
the
entire
market’s
Sell-Side
Risk
Ratio
isn’t
of
interest,
but
rather
that
of
only
a
specific
segment
of
it:
the

short-term
holders
(STHs).
These
investors
are
typically
defined
as
those
who
acquired
their
coins
within
the
past
155
days.

The
below
chart
shows
the
trend
in
the
metric
for
this
cohort
over
the
past
decade:

The
value
of
the
indicator
appears
to
have
been
going
down
over
the
last
few
months
|
Source:

@_Checkmatey_
on
X

As
is
visible
in
the
graph,
the
Sell-Side
Risk
Ratio
for
the
Bitcoin
STHs
had
shot
up
to
a
very
high
level
when
the
rally
towards
the
new
all-time
high
(ATH)
had
occurred
earlier
in
the
year.
Historically,
the
STHs
have
shown
to
be
the
fickle-minded
hands
of
the
market,
who
sell
easily
at
the
sight
of
any
FOMO
or
FUD
in
the
sector.
As
such,
it’s
not
surprising
to
see
that
these
investors
had
ramped
up
their
profit
realization
alongside
the
rally.


Related
Reading

Since
this
peak,
though,
the
indicator
has
gone
through
a
steep
decline
as
the
price
of
the
cryptocurrency
has
been
stuck
in
endless
consolidation.
Following
the
drawdown,
the
metric
has
now
returned
to
relatively
low
levels.

It
would
appear
that
as
the
tight
sideways
movement
has
occurred,
sellers
among
the
STHs
have
seen
exhaustion.
“Bitcoin
is
coiled
like
a
spring,
and
it
usually
doesn’t
sit
still
like
this
for
long,”
notes
the
analyst.
With
the
asset’s
price
surging
to
$71,000
in
the
past
day,
it’s
possible
that
this
unwinding
may
already
be
here.

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BTC
Price

Bitcoin
has
enjoyed
an
increase
of
around
3%
in
the
past
24
hours,
which
has
now
taken
its
price
to
$70,900.

Looks
like
the
price
of
the
coin
has
witnessed
a
rise
over
the
last
few
days
|
Source:

BTCUSD
on
TradingView

Featured
image
from
Dall-E,
checkonchain.com,
chart
from
TradingView.com

Go to Source
Author: Keshav Verma


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