[Analysis] "Bitcoin short-term investors become sensitive to volatility…lack conviction in positions"

Short-term Bitcoin (BTC) investors have become more sensitive to price volatility than before, according to an analysis.

CryptoZeno, a CryptoQuant contributor, said on the 31st (local time) via CryptoQuant, "The SOPR (Spent Output Profit Ratio) of Bitcoin short-term holders (STH) is hovering around the key baseline of 1.0." CryptoZeno explained, "The SOPR of short-term holders is a behavior-based on-chain indicator that shows whether they are realizing gains or selling while taking losses," and analyzed that "the recent SOPR trend shows market participants' confidence is very fragile."

CryptoZeno emphasized, "Throughout the observed period, the SOPR of short-term holders did not sustain a meaningful breakout above 1.0." He added, "There were temporary entries into profit-taking zones, but the flow repeatedly returned quickly to neutral or loss-realization zones," and "this means (Bitcoin) short-term holders are reacting extremely sensitively to price movements and lack the conviction to withstand volatility and maintain positions."

The analysis also noted that recent upward momentum on the SOPR indicator is limited. CryptoZeno said, "The fact that the short-term holders' SOPR cannot stably exceed 1.0 means current demand is not sufficiently absorbing the supply from recent buyers who entered near the peak," and "as a result, upward attempts continually hit upper resistance, creating a structure where momentum expansion is limited."

He suggested the current phase could be the late stage of a bear market. CryptoZeno observed, "Periods where the short-term holders' SOPR clearly falls below 1.0 have closely coincided with sharp price adjustments," and "this means selling pressure was dominated by stress-driven selling rather than strategic selling." He added, "This pattern generally appears in the late phase of a bear market or the early recovery stage," and "during such times, investors tend to prioritize capital preservation over trend following."

He also mentioned the possibility of further declines. CryptoZeno analyzed, "Until an environment is created in which short-term holders can stably realize profits without immediate selling, the Bitcoin market is likely to remain structurally vulnerable," and "(if SOPR) deteriorates, the risk of additional sideways movement or expanded downside volatility could increase."