While there is still no formation of a bearish trend in the BTC market, the digital asset is struggling to break above $100,000. Data according to CryptoQuant shows a decreasing STH SOPR, a significant on-chain data measuring BTC transactions’ profitability.
As per the metrics, the declining STH SOPR signals that Bitcoin is preparing for a deeper correction or a period of wider consolidation. This implies that the crypto may not be ready to experience an immediate bullish recovery anytime soon.
Bitcoin supply dynamics
“STH SOPR is declining, which could hinder an immediate bullish recovery. In the short term, a period of consolidation or even a deeper correction might occur.” – By @Darkfost_Coc
Full post 👇https://t.co/3YULAu06h7 pic.twitter.com/Hkb4g4LuNY
— CryptoQuant.com (@cryptoquant_com) January 3, 2025
Bitcoin facing downturn pressure
Bitcoin price is witnessing rising pressure as whales continue to offload their positions. This trend has triggered concerns that the ongoing consolidation could heighten.
Today, CryptoQuant realized data indicating that STH SOPR is decreasing, meaning short-term Bitcoin holders are increasingly selling their positions at a loss.
The interplay of several factors could have triggered the formation of this trend. First, the emergence of a bearish market sentiment appears to have caused panic selling, influencing short-term holders to dispose of their holdings at a loss to avoid greater possible losses.
Another possible reason is that margin traders who leverage borrowed money to expand their BTC holdings are vulnerable to selling at a loss. Such forced selloffs may be responsible for the decline in STH SOPR. Lastly, the decrease in STH SOPR could indicate a loss of confidence among short-term traders, resulting in a decrease in Bitcoin’s demand.
In the past, whale liquidations have been crucial in influencing market sentiment, typically increasing volatility and causing wider sell pressure.
At present, Bitcoin price is moving at a near crucial support level at $93,491. However, continued selloff by whales could push it lower into the bearish territory. Some market analysts project that without a robust recovery in buying demand, BTC could embrace a bearish momentum.
However, some consider this as an opportunity for accumulation, with anticipations that BTC will renew its value as macroeconomic conditions improve. Whale activity still holds the key to determining the token’s short-term movement. Currently, all eyes are on Bitcoin’s trajectory, as its price swings on the edge of deeper consolidation and potential bounce back.
Bitcoin price updates
Today Bitcoin is trading at 98,368.93, up 1.2% in the last 24 hours at press time. While its value is up 4.1% in the last seven days, it is down 11% from an all-time high of $108,000 reached last month.
Bitcoin’s continued market correction happens amid investors’ fear that the sense of misery surrounding the stock markets could soon begin pulling down cryptocurrency prices.
Major US stocks are trading down as investors worry about increased interest rates and stubborn inflation. Chinese stocks are also down amid signals that the Asian nation’s economy is weakening.
The correlation between stocks and crypto assets remains strong. When stock prices drop, investors have fewer funds to pour into Bitcoin and other altcoins.
Since late December, the US and Chinese stock markets stalled, and that undermined the positive mood of crypto traders. Increasing selloffs in the wider crypto markets could happen; stock traders are already seeing that in equities.
