Recent data from Glassnode, an on-chain analytics firm, reveals that short-term holders (STHs) of bitcoin are currently posting more profits than losses, and are in green, “making money.”
STHs are mostly traders, eager to clip bitcoin’s volatility in their quest to make money. They mostly hold for short periods, riding the uptrend before liquidating and realizing profits when prices move against them.
Bitcoin STHs are making money
Based on the “realized profit/loss ratio,” a trading indicator that examines the on-chain history of on-chain BTC within a given time frame, present readings suggests that STHs are selling their coins at a profit rather than a loss, an observation that comes when prices have been volatile in the first week of July.
Specifically, the 7-day exponential moving average (EMA) of the bitcoin STH realized profit/loss ratio has been consistently above 1 lately. This indicates that short-term holders are currently in green, raking in more profits than losses.
As such, based on this ratio, there could be more STHs selling their coins for profits, an expected formation considering that they are not HODLers who, regardless of market conditions, would hold their coins. Instead, as history shows and based on STHs trends, they will liquidate once they are in profits.
In the past, this indicator has typically remained in this range during market rallies, as STHs naturally accumulate significant profits during such periods. Conversely, during bearish phases characterized by a steady decline in price, the indicator has remained below the 1 mark, reflecting that most selling from these investors occurs at a loss.
Options traders bullish
As of the time of writing, Bitcoin is trading around $30,500, steady in the past few trading days. Technically, BTC prices remain below $31.3k and bullish following the consolidation in the last days of June.
There could be hints of recovery based on how Options traders have been lining up their orders. Based on on-chain data, there are more “calls” than “puts”, meaning more traders are optimistic of a recovery. At the same time, the Bitcoin Options open interest, which aggregates the total open orders, is near October 2021 highs of around $15.05 billion.
