• Short-term Bitcoin (BTC) holders are at a loss, making it a potential buying opportunity, but experts urge patience.
• STH-SOPR below 1.0 indicates short-term holders are realizing losses; experts recommend waiting for deeper losses.
• The best time to buy Bitcoin is when STH-SOPR enters the green zone, signaling the market’s lowest point.

The past Bitcoin (BTC) market pattern is a key point to note that has been recently outlined by cryptoquant analysts. This analysis indicates that the price of Bitcoin is at present level below the STH-REALIZED price reflecting that short term traders are at a loss. Although this might seem like the perfect accumulation zone of good investors, some are warning of the rashness to venture into the market, advising that people should be patient.

Source: X

The short-term holders, that is those holding BTC less than half a year, are accruing losses. This is seen through the STH-REALIZED price that indicates that such holders purchased BTC at a higher price as compared to its present price. 

Is It Time to Buy Bitcoin?

Some people might consider it as an opportunity to buy, however, the professionals do not want people to rush. The losses, which are being experienced by these short-term holders, are not so massive, and too soon may result in unfriendly market conditions.

Also Read: Altcoin Season Index Drops to 39 as Bitcoin Regains Market Dominance

The most critical indicator of the prevailing circumstances is the STH-SOPR that can be used to assess the profitability of short-term holders. Currently, the STH-SOPR stands at 1.0 or less meaning that short-term holders are losing money. 

Source: X

As this may be a potential opportunity to the investor it is important to comprehend that the losses are not such that they will cause an investor to rush with the investment. Analysts recommend that investors should wait until there are larger losses that will make the investment opportunity more lucrative.

The analysis further breaks down short-term holders with the holding period into three groups. The former segment is comprised of people who owned BTC within 1 week to 1 month. The other group consists of the holders who possess between 1 and 3 months of ownership of the BTC. 

Lastly, there is the third group that comprises 3 to 6 months holders. Most of the selling at a loss is under the first two groups and this may indicate that these investors are actually taking their losses and selling their investments.

Source: X

The Risk of Panic Selling in Bitcoin

As of today, the price of the BTC is slightly higher than the median price of the third category of users, which is between 3-6 months holding. This is a group that is not lost yet, but they are bordering it.

As the price of BTC keeps falling, it is plausible that they will go into negative territory and hence lead to a panic sell-off. This selling pressure may drive the price of Bitcoin further down and give the investors more chances to invest at a favorable price.

The analysts warn that the optimal time to purchase BTC is when short-term investors are registering greater and more notable losses. Once the STH-SOPR indicator will enter the green territory, it will indicate that BTC will reach their lowest point. 

It is at that point that the experts suggest that investors start buying BTC gradually and consistently. Early-bird preparations may cause one to buy BTC when it has not bottomed yet.

Another areas of analysis highlighted are that the crypto market is a zero-sum game, and the downfall of one individual may lead to the success of another. Timing is however the key to making this strategy work. Investors need to wait until the market indicates more obvious cases of immense losses but when the STH-SOPR indicator shows that Bitcoin has reached its bottom.

Also Read: Bitcoin Whales Accumulate for Explosive November Rally Toward $123,000