Some Bitcoin speculators panicked as the market fell below $70,000, latest data showed.
Short-term holders (STH) offloaded 54,000 BTC on October 31, the most since April, according to data from on-chain analytics firm Glassnode.
STH gains fizzle as BTC price gives up gains.
Opportunistic Bitcoin (BTC) traders quickly lost their cool as BTC/USD reversed from near all-time highs this week.
According to Glassnode, which tracks transfer volume from STH companies to exchanges, 54,352 BTC (about $3.76 billion) was transferred in inbound exchange transactions on October 31st alone.
Send Bitcoin STH trading volume to the exchange. Source: Glassnode
STH is a wallet that stores a certain amount of BTC received for up to 155 days. In contrast to long-term holders (LTHs), whose funds may sit dormant in their wallets for months or years, they typically exhibit reactionary trading behavior.
Price volatility is a typical trigger for the STH crowd, and Glassnode reveals that gross profit margins are likely to be quickly wiped out, adding to the sense of urgency for a sale.
The STH Consumption Output Profit Ratio (SOPR), which quantifies that number, is currently measured at less than 1.01, with 1 being the break-even point. On October 29 it was almost 1.04.
Bitcoin STH-SOPR. Source: Glassnode
Glassnode also shows that a significant portion of coins sent to exchanges on October 31 were lost to STH companies.
Bitcoin STH, LTH trading volume is sent to the exchange. Source: Glassnode
Bitcoin is at risk of a “deviation” above $70,000.
Exchange order book liquidity data from monitoring resource CoinGlass shows the next area of interest around $68,000. Liquidity is now back between spot prices and all-time highs.
relevant: With Bitcoin ETFs receiving close to $1 billion in daily inflows, BTC price risks hitting new ‘FOMO’ highs.
BTC liquidation heatmap (screenshot). Source: Coinglass
Analyzing the latest move, traders were divided over its significance. While some have warned that the entire trip above $73,000 could be an “aberration,” others have argued that BTC price action continues to mirror previous halving years.
“In both 2020 and 2016, we jumped into the election five to six days before the election,” said X account HornHairs.
“After that, prices never again retested the lows set the week before the election. Be careful what they sell here.”
source: keith allen
As Cointelegraph reported, this week’s major US macroeconomic report in the form of non-farm payroll data is scheduled for release on November 1 and is being closely watched by risk asset traders.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.