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Bitcoin Traders Brace for FOMC Meeting as Short-term Holders Dominate the Market

In the world of cryptocurrency, market trends are constantly changing, and it’s essential to keep an eye on the various indicators that can provide insight into the behavior of traders and investors. Recently, CryptoQuant data has revealed that short-term traders are preparing to sell their Bitcoin, as indicated by an increase in the Exchange Reserve metric.

Exchange Reserve is a collective measure of the potential coins that are ready to be sold in the market. It is calculated based on Exchange In/Outflow and Netflow, which naturally follows the indications that in/outflow has. If the netflow trend is increasing, it indicates selling pressure, whereas a decreasing trend indicates buying pressure.

Source: CryptoQuant

The current Exchange Reserve value of 2.19 million worth of Bitcoin stored in exchanges suggests that short-term traders are preparing to sell their holdings. The Short Term Output Profit Ratio (STH-SOPR) indicator, which measures the ratio of spent outputs in profit, also suggests that short-term traders dominate the market.

The STH-SOPR indicator is calculated as the USD value of spent outputs at the spent time (realized value) divided by the USD value of spent outputs at the created time (value at creation). If the value is above 1, it means that traders are selling their Bitcoin at a profit. Conversely, if the value is below 1, it indicates that traders are selling their Bitcoin at a loss.

According to CryptoQuant, the STH-SOPR indicator touched 1.05 on March 14th, indicating that short-term traders dominate the market currently. There are several factors that may be driving this trend, including the upcoming FOMC meeting on March 22nd, the approach of Ramadan for Muslim traders, and some traders feeling satisfied with their profits and preparing to exit the market at $30k.

Additionally, the $29k to $32k price range presents a significant resistance level that needs to be taken into account. As the current price is already at $27k+, traders are preparing to gradually sell their Bitcoin supply.

It’s crucial to note that the FOMC meeting on March 20-21 is expected to have a significant impact on the market, so traders are advised to proceed with caution. As the cryptocurrency market continues to evolve and grow, it’s essential to keep a close eye on these indicators and factors that may influence market trends. By doing so, traders and investors can make informed decisions and navigate the market effectively.

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