In a recent post on X, Glassnode discussed how short-term price movements are often determined by the reactions of top buyers to declines after ATH. As prices drop, these holders quickly incur losses and may easily execute panic moves.
Bitcoin is currently in such a phase, with a significant supply having a cost basis in the range between the latest spot price and $120,000, as the chart below shows.
The indicator on the chart is the Cost Basis Distribution, as the name suggests, it shows us the amount of BTC supply that was last exchanged at different price levels. From the indicator's data, it is clear that investors have gradually accumulated a dense supply group below $120,000 as this asset has traded within this range since the beginning of July.
The recent decline in Bitcoin's price has naturally caused these investors to incur losses, so the question is: how have these holders reacted? One metric that may help clarify this issue is the Spent Output Profit Ratio (SOPR). This metric compares the profit and loss level that all investors are experiencing on the network.
When the SOPR value is greater than 1, it means that the average holder is selling their coins to take profits. On the other hand, a lower value indicates that profit-taking activities are dominating the network.
In the current discussion, what is noteworthy is not the SOPR of the entire market, but that of a specific segment: the top buyers. These are the investors who have entered the cryptocurrency market in the past three months.
Below is the chart shared by Glassnode showing the SOPR trend of Bitcoin for the investor age group:
As can be seen in the chart above, Bitcoin's SOPR has decreased in all three time segments from 1 day to 1 week, from 1 week to 1 month, and from 1 month to 3 months after the price drop.
The indicator currently fluctuates between 0.96 and 1.01 on these groups, indicating that these investors have started to sell with slight losses. Glassnode notes: 'If the pressure increases, a local bottom often forms when this group capitulates, usually when the SOPR drops below ~0.9.'
However, at the moment, it seems that Bitcoin does not need to wait for this capitulation signal as its price has recovered over the past day.
