Last week, Bitcoin saw consistent upward momentum, leading to the asset breaching multiple resistances to achieve a peak of $93,477 finally. However, ever since, BTC has seen a price decrease and appears to maintain stability above $90,000 while showing signs of controlled market sentiment.

Amid this price performance, a CryptoQuant analyst known as G a a h recently shared his perspective on Bitcoin’s current market behavior, focusing on an important metric such as the Short-Term Holders Spent Output Profit Ratio (STH SOPR) to reveal whether the asset still has more room for growth.

What The STH SOPR Metric Suggest For Bitcoin

The Short-Term Holders Spent Output Profit Ratio metric, which tracks the profitability of Bitcoin held by short-term holders, has revealed a trend of moderate optimism in the market, according to G a a h.

The analyst elaborated that unlike past cycles marked by euphoric price spikes, the STH SOPR remains within a “middle region,” far from indicating extreme greed. This suggests that while some investors are taking profits, the current market environment remains stable, with room for further upward movement.

The relationship between the SOPR indicator and Bitcoin’s 30-day moving average further emphasizes this point. According to the CryptoQuant analyst, short-term holders take measured profits without overwhelming the market with sell pressure, signaling “healthy growth.”

Historical data shows that when the SOPR enters the extreme greed range, Bitcoin often encounters significant market resistance, leading to corrections.

Conversely, accumulation tends to occur when the indicator reflects extreme fear, often marking key price bottoms. The analyst’s observations suggest that Bitcoin remains in a transitional growth phase, with investors carefully adjusting their positions as the price trends upward. G a a h wrote:

At the moment, the behavior of the SOPR suggests a phase of healthy growth, with moderate optimism. This intermediate position may reflect a market in transition, where investors continue to adjust their positions as the Bitcoin price advances.

Key Indicators to Watch in Bitcoin’s Market Behaviour

While the SOPR currently suggests a balanced market, as reported by the analyst, he also advised investors to monitor the movements of the indicator closely in the coming weeks. The analyst noted:

If it quickly approaches the extreme greed range, it could be a sign of more aggressive profit-taking and a possible trend reversal.

G a a h also added that this phase of moderate optimism, if sustained, could create opportunities for continued upside potential, but risk management remains a crucial aspect of navigating this market environment.

The CryptoQuant analyst concluded:

While the SOPR indicates that the top has not yet been reached, the balance between optimism and caution is key to maximizing gains and protecting capital from high price volatility.

Featured image created with DALL-E, Chart from TradingView