In the world of cryptocurrency, Bitcoin has been the center of attention for investors and enthusiasts alike. However, recent data suggests that long-term holders of Bitcoin may soon generate selling pressure in the market. This development has sparked caution among investors and could have significant repercussions for the crypto sector, including the emerging metaverse.
One key metric that has been observed by analysts is the SOPR (Spent Output Profit Ratio), specifically when the EMA100 (Exponential Moving Average with a 100-day timeframe) breaks the 1.0 mark. This signifies a potential entrance for profit-taking among long-term holders. Historical data reveals that when this breakout occurs, the price of Bitcoin has not experienced significant gains. Instead, it has often endured months of tedious declines and sideways movement, providing opportunities for buyers to acquire Bitcoin at a lower price than at the time of the SOPR 1.0 break.
Looking back at the small bull market of 2019, the SOPR 1.0 breakout resulted in an initial gain of approximately 50%. However, these gains were short-lived as Bitcoin failed to sustain its upward momentum and eventually dropped below the price at the breakout. Such patterns suggest that the current wait for a potential price surge might not be easy for investors, and exercising patience in the coming months could be crucial.
The implications of this development extend beyond just Bitcoin. The broader crypto sector and the nascent metaverse, a virtual universe powered by blockchain technology, could also be affected. With Bitcoin being a significant driver of market sentiment, any major price movements or prolonged declines could have a ripple effect on other cryptocurrencies and digital assets, including those used within the metaverse.
As the bearish sentiment prevails, experts are urging investors to remain cautious and conduct thorough research before making any investment decisions. The volatility of the cryptocurrency market is well-known, and while Bitcoin has experienced significant growth in recent years, it is important to recognize the potential risks involved.
However, a different data posted recently by Glassnode, an on-chain analytics firm, suggested that Bitcoin has now for long has been settling into the tightest price range for months despite the tumultuous activities that were expected to stir the market.
Simultaneously, another data suggested that the exchange outflows have maintained their traction in recent times and the exchange balance has continued to decline. The Bitcoin exchange balance has fallen below 12%, this is the lowest value achieved since this was first achieved at the beginning of the year.
The historical data suggests that patience may be necessary in the coming months as Bitcoin could endure a period of declines and sideways movement. The implications of this development extend beyond Bitcoin and could impact the broader crypto sector and the emerging metaverse. Cautious and informed decision-making is advised during these uncertain times in the crypto market.