Bitcoin Eyes Record High as Short-Term Holders Fuel the Rally

Bitcoin is hovering near $103,000 following an aggressive multi-week rally, as the market eyes a potential breakout above its $109,000 all-time high.

Bitcoin is trading in a pivotal zone of support, with short-term holders now entering profit territory, according to on-chain data from CryptoQuant.

After slicing through major resistance levels at $90K and $100K, the top cryptocurrency is currently consolidating between $100K and $101K. This support zone has so far held firm, with dip buyers stepping in.

As the cryptocurrency edges closer to its all-time high of $109,000, set back in March 2023, the focus is now turning to whether BTC can sustain its current level and mount a new push higher.

Short-term holders in profit territory

On-chain data reveals that short-term holders (STH) re-entered profit territory when Bitcoin reclaimed $99K on May 8. Since then, the STH Spent Output Profit Ratio (SOPR) has remained above 1, a signal that these participants are selling at a profit—typically a sign of growing market confidence.

However, analysts caution that as SOPR approaches 1.03, the risk of increased profit-taking rises. While some selling is expected, the trend so far appears healthy, with restrained activity among holders and no signs of panic.

CryptoQuant contributor Darkfost notes the market is “just getting warmed up,” suggesting further upside may be possible if BTC can defend its current range and push for a new high.

💫 Since May 8th, STH have finally moved back into profit territory as $BTC crossed above $99 000.

°Their SOPR (Spent Output Profit Ratio) has been above 1 since that date, indicating that they are selling at a profit.

💡— It’s important to understand that short-term holders (STH) are defined as entities that hold coins for less than 180 days. As such, they are typically less patient and more likely to be driven by short-term price trends. In contrast, long-term holders (LTH) are defined as entities that hold coins for 180 days or longer and tend to be more patient and less sensitive to short-term price fluctuations.

As STH SOPR rises above 1, it signals that, on average, STHs are selling their coins at a higher price than they bought them for, which can be interpreted as a sign of market confidence. However, as the ratio approaches 1.03, there is a greater chance of STHs taking profits, which could lead to a decrease in the price of bitcoin. Despite this, the fact that STH are calmly selling their coins in a narrow range and there are no signs of panic selling suggests that the trend may continue for some time yet.

The altcoin market is also beginning to heat up, which could create even more demand for bitcoin and fuel further price increases.

The next move by bitcoin will be pivotal for the broader cryptocurrency market in the coming weeks.