The data shows that the price of Bitcoin has become more lively at the current six-week highs as profit taking is back on the agenda.
Bitcoin metric warns of profits as ten-year BTCs wake up
Bitcoin price action is waking up this week as it hits six-week highs. Data from on-chain analytics firm Glassnode shows that “asleep” Bitcoins are back into circulation. BTC/USD gained some upward momentum in the second half of October. Investors are changing their behavior after a year-long bear market.
According to Glassnode, the number of Bitcoins that previously remained stable in their wallets for 7-10 years but were not active again has reached a one-month high. This is actually the latest in such a loud series, along with the previous one seen on Oct.
Other figures reveal that unspent transaction output (UTXOs) in profits reached a one-month high of 73% on October 28, aiming to hold the levels in September. Glassnode shows that moving Bitcoin was quickly made with profit rather than loss.
SOPR increases in key range
The data reinforces the theory that at current prices, the desire to make a profit is increasing even among the most experienced holders of Bitcoin. As a key network metric, such for-profit activity could increase significantly, even if the spot price generates only modest growth. The latest readings from Bitcoin’s Profit Spent Ratio (SOPR) suggest that further price increases will place BTC/USD in a classic profit-taking country.
SOPR essentially indicates the extent to which the BTC supply is sold at profit or loss. Ratio fluctuating around 1 tends to be negative in bear markets. Also, when it exceeds 1 while rising, it indicates an increase in supply that may affect price performance. Renato Shirakashi, one of the well-known crypto analysts, looked at the metric in 2019, “Everybody sells in the bear market. They are also waiting for the breakeven point to sell,” he says.
When SOPR is close/large to 1, people start to sell even more as they reach the breakeven point. With increasing supply, the price goes down.
As the analyst reports, some on-chain signals indicate that the overall picture is more nuanced. Binance, the largest exchange by volume, saw the biggest BTC balance drop ever this week. This shows that users have withdrawn more than 55,000 BTC in a single day.
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