Analysis: Bitcoin Short-Term Overheating Signal Suggests Pullback May Be Near

Forecast Trend Report by Period

Bitcoin may be nearing a short-term correction as short-term holders increasingly lock in profits, according to a CryptoQuant analysis.

In a report published Aug. 29, CryptoQuant contributor MAC.D wrote that the seven-day moving average of Bitcoin’s short-term holder SOPR, or STH SOPR, has surged to about 1.03. That puts the indicator back at a level that has previously preceded short-term pullbacks.

The short-term holder SOPR measures whether investors who held Bitcoin for a relatively brief period were realizing profits or losses when they moved their coins. A reading above 1 means short-term holders are, on average, moving Bitcoin at a profit, while a reading below 1 indicates they are selling at a loss.