Bitcoin faces 9% weekly loss as long-term holders act cautiously


5th July 2024 – (Hong Kong) Bitcoin, the world’s largest cryptocurrency, has experienced a challenging week, with a 9% decline in its value over the past seven days. At one point, BTC briefly dropped below $54,000 before recovering to trade at $55,275 at the time of writing.

This significant depreciation has prompted long-term investors to exercise caution, as Bitcoin breached a critical threshold on the charts during its price fall. Recent analysis of Bitcoin’s Spent Output Profit Ratio (SOPR) for long-term holders and Spent Output Age Bands sheds light on notable trends.

The SOPR for long-term holders surpassed 10, indicating that despite the declining BTC prices, these holders have made substantial profits when moving their Bitcoin to exchanges. The current chart shows a SOPR value above one, reinforcing this trend.

Further analysis of the Spent Output Age Bands reveals that holders within the 5-7 year category have been the most active, transferring over 10,000 BTC on July 3rd. This marks the highest transaction volume in months for this particular group.

Aside from the impact of Bitcoin’s price decline, recent developments surrounding the defunct exchange Mt. Gox have also influenced the actions of long-term holders. Reports indicate that Mt. Gox has moved a significant amount of Bitcoin, including transfers to a hot wallet, as part of its preparations to repay creditors more than a decade after its collapse.

This movement of BTC by Mt. Gox involves 47,229 Bitcoins valued at approximately $2.71 billion. With the exchange set to repay around $8.5 billion worth of Bitcoin to its creditors, the anticipation of these transactions may prompt long-term holders to adjust their holdings due to concerns about a potential further drop in BTC price.

Additionally, recent analysis suggests that short sellers have dominated the Bitcoin market over the past 48 hours. According to the BTC Long/Short Ratio chart from Coinglass, short positions accounted for 52.81%, while long positions represented 47.19% on July 4th.