Bitcoin is becoming livelier at current six-week highs, data shows, as profit-taking returns to the spotlight.
Bitcoin
BTC
dial down
$21,186
Sleep up to a decade and wake up this week as BTC price action hits six-week highs.
Data from on-chain analytics firm Glassnode shows that some of the oldest “dormant” bitcoins are coming back into circulation.
BTC trends out of hibernation
As BTC/USD returns in the second half of October, hodlers are changing their behavior after a year-long bear market.
According to Glassnode, the amount of Bitcoin that was previously stationary in your wallet for 7-10 years, but not active, hit a monthly high again on Oct. 29.
This is actually the latest in a series of such highs, with the previous one seen on October 1.
Amount of BTC supply in the last active 7-10 year chart. Source: Glassnode/Twitter
Other figures show that unspent transaction costs (UTXO) in earnings hit a monthly high of over 73% on Oct. 28, aiming to dwarf September levels.
Glassnode shows that Bitcoin is moving fast with gains, rather than losses.
Unused transaction costs (UTXO) of Bitcoin on the earnings chart. Source: Glassnode/Twitter
SOPR Peaks Through Key Range
The data reinforces the theory that there is a growing desire to profit, even among the most experienced Bitcoin users, at current prices.
Related: Surrender or Take Profit? Bitcoin Whale Moves 32K Idle BTC Since 2018
Such profit-taking activities could rise significantly even if the spot price posts only modest growth, a key network metric says.
The latest Bitcoin Spent Profit Output Ratio (SOPR) readings show that further price increases put BTC/USD in classic profit-taking land.
SOPR essentially shows the extent to which the BTC supply is being sold at a profit or loss. Fluctuating around 1, the ratio tends to be negative during bear markets, and when it crosses 1 while higher, it indicates an increase in supply, which in turn can affect price performance.
“In a bear market, everyone either sells or waits for break-even to sell,” creator Renato Shirakashi explained in an introduction to the metric in 2019:
“When the SOPR is close to/above 1, people start selling even more because they break even. With more supply, the price falls.”
The Bitcoin Spent Output Profit Ratio (SOPR) history chart is updated once a day. Source: Glassnode
As Cointelegraph reported, some on-chain signals suggest the overall picture is more nuanced.
Binance, the largest-volume exchange, dropped its largest BTC balance this week, indicating that users withdrew more than 55,000 BTC in a single day.
The views and opinions expressed in this document are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
