In the last seven days, the value of Bitcoin the world’s largest cryptocurrency dropped sharply by 9%. The drop was so severe that BTC briefly went below $54,000, but it quickly rose back up to $55,275 at press time.During this drop, Bitcoin [BTC] crossed a key level on the charts, which warned long-term buyers to be careful.
This change might have something to do with current events involving Mt. Gox, an exchange that went down more than ten years ago.Analyst’s analysis Bitcoin’s Spent Output Profit Ratio (SOPR) for long-term holders and Spent Output Age Bands showed some interesting patterns.
Long-term holders had a SOPR greater than 10, which means that even though the price of BTC fell, these holders made a lot of money when they moved their BTC to exchanges. The current chart shows that this trend was emphasized by a SOPR number above one.
Bitcoin Price Decline Impact
Analyst’s study of the Spent Output Age Bands also revealed specific groups of long-term holders who are constantly transferring Bitcoin. People who had their bitcoins for 5 to 7 years were the most busy, trading over 10,000 BTC on July 3rd. For this group, this was the busiest day for transactions in months.
Along with Bitcoin’s falling price, recent events related to the now-defunct exchange Mt. Gox may also affect what long-term users do. Reports say that Mt. Gox has recently moved a lot of BTC to a different wallet, including some moves to a “hot wallet.” These steps are being taken by the exchange to get ready to pay back its debts more than ten years after it went bankrupt.
Arkham stated that Mt. Gox traded 47,229 Bitcoins worth around $2.71 billion. There is a chance that long-term BTC holders will sell their stocks because Mt. Gox is about to repay its creditors with about $8.5 billion worth of BTC. This change could be because people are afraid that the price of BTC will drop even more because of these big repayments.
Bitcoin was worth about $55,300 at the time of publication. A new study says that short sellers have been in charge of the market for the past 48 hours. Coinglass’s BTC Long/Short Ratio chart shows that short positions made up 52.64% of all positions, up from 47.36% for long positions on July 4th. Since then, the short ratio has gone up a little to 52.81%, while the long ratio has gone down to 47.19%.
