On-chain data shows the Bitcoin short-term holder profit-taking has reached high levels not seen since the November of 2021.

As pointed out by an analyst in a CryptoQuant post, a near-term top usually becomes more probable when this trend forms for BTC. The relevant indicator here is the “Spent Output Profit Ratio” (SOPR), which tells us whether the average Bitcoin investor is selling at a loss or at a profit right now.

When the value of this metric is greater than 1, it means the holders as a whole are realizing some profit on their selling currently. On the other hand, values below the threshold suggest the overall market is selling at some loss at the moment.

Naturally, the indicator having a value exactly equal to 1 would suggest the average investor is just breaking even right now as the total amount of profits being realized in the market is equal to the losses currently.

The SOPR here covers the entire market, but the metric can also be modified to cover only certain segments of the market. One major part of the sector is made up of the “short-term holders” (STH) which is a cohort that includes all investors that acquired their coins within the last 155 days.

Now, here is a chart that shows the trend in the 30-day moving average (MA) Bitcoin SOPR specifically for these STHs over the last several years:

As displayed in the above graph, the 30-day MA Bitcoin STH SOPR had been below a value of 1 throughout the 2022 bear market, implying that these investors had been selling at a loss during this period.

The quant has also marked previous instances of such a trend with the green boxes in the BTC price chart. It looks like this trend was also observed during bearish periods of the past cycles.

Recently, with the latest rally, the metric has sharply climbed and broken out of this zone, as its value is above 1 now. This suggests that there is more profit harvesting happening from this cohort than loss realization currently.

This makes sense as prices right now are significantly higher than they were during the last 155 days window, which is when the STHs would have bought their coins, so these holders must be in some decent profits currently.

As the rally has continued, the STHs seem to have rapidly ramped up their profit-taking as well, since the SOPR indicator for them has also continued to shoot up. The level of their profit realization is now comparable to that seen in November 2021, when Bitcoin set its all-time high.

As for what this current profit-taking may imply for BTC, the analyst explains, “when retail starts to get euphoric, the probability of a near-term price top starts to increase.”

At the time of writing, Bitcoin is trading around $23,800, up 3% in the last week.

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