- The STH-SOPR surpassed a value of 1, suggesting possible short-term profit-taking.
- An analyst noted that Bitcoin could hit $58,000, but the retracement might be shocking.
Whether it is good or bad news for you, Bitcoin’s [BTC] correction has become increasingly closer than you think. However, there is one major issue with the forecast that has put market players on opposite sides.
Will the drawdown happen before the having or after?
Interestingly, AMBCrypto came across an opinion that BTC would correct pre-halving. Around the same period, we noticed another analyst saying that Bitcoin would surpass its yearly high before the event.
One side takes the preliminary
CryptoOnchain, a pseudonymous author on CryptoQuant, posted that Bitcoin might plummet to $48,000 in the coming days.
The author made his conclusion based on the Short Term Holder (STH) Spent Output Profit Ratio (SOPR).
Source: CryptoQuant
The STH-SOPR assesses the behavior of short-term investors by considering the output younger than 155 days. Values of the STH-SOPR over 1 suggest that investors are selling at a profit.
But when the value is below 1, it means investors are cashing out at a loss.
However, the chart above showed that the value had risen above 1. It also revealed that the SOPR was at a point where Bitcoin’s price corrected over the past few months.
In addition to the on-chain analysis, CryptoQuant also examined the technical angle. Concerning this part, the analyst wrote,
“Bitcoin is approaching the selling area of short-term investors. Examining the technical chart also confirms this issue. Bitcoin is in the area below the resistance in the technical chart.”
The other sticks with history
However, Michaël van de Poppe did not share a similar view. According to him, Bitcoin’s correction would happen, but not before prices climb to $54,000 or $58,000.
In his point, the analyst also mentioned that the decline could be harder, noting that BTC could drop as low as 40,000 after the halving.
Source: X
Historically, Bitcoin’s price has increased before the halving. After the event, the coin shreds a significant part of its value before heading for a new high.
AMBCrypto went ahead to analyze the price action before the last two halvings.
The second halving happened on the 9th of July 2016. From our observation, BTC climbed to $617 before the event. Later on, the price plunged.
A similar occurrence took place during the third halving, when Bitcoin’s price jumped to $9,619. Weeks after the event, the price significantly decreased.
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AMBCrypto believes that Bitcoin might go either way this time, depending on where capital rotates. If market participants decided to drive liquidity into BTC, then the price might rise toward $54,000.
However, rotation into altcoins could see BTC’s value shrink. But at the same time, the presence of institutional money, which was not present in the last two halvings, could change things.
