Bitcoin: Is this cohort to blame for BTC’s correction?

December 14, 2023

By Abiodun Oladokun

• BTC’s decline from the $44,000 price level was due to its short-term holders.

• The demand for BTC worsened, as the price cratered by almost 10% in the last week.

Bitcoin’s [BTC] upward momentum above the $44,000 price mark hit a wall last week, suggesting a potential shift in investor sentiment, especially the coin’s short-term holders (STHs), Glassnode found in a new report.

The short-term holders are to blame

The on-chain data provider assessed the coin’s STH-Supply Profit/Loss Ratio. This metric, which measures how much profit or loss BTC STHs are making, helps spot when these investors are scared (selling too much) or greedy (buying too much).

Historically, a Profit/Loss ratio above 20 indicates overheating conditions, below 0.05 suggests oversold conditions and around 1.0 signifies a break-even point.

When the market rally began in October, the STH-Supply Profit/Loss Ratio rallied above 20,

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