Short term holder exhaustion in a time-based capitulation

Short-term-holder-exhaustion-in-a-time-based-capitulation

Not much price action has happened over the last few weeks, even months. Short-term holders have stayed strong since June, so it’s long term holders who have been bringing price down (as mentioned in the previous article about spent output profit ratio).

There are two main bearish arguments that can be extracted from the chart above. The first one is the marked bearish divergence: price is lower, but short-term traders are making gaining more. The latter goes around the fact that SOPR above 1 indicates there are more profits than losses, and that seems to be a resistance since April.

As opposed to May-June’s price-based capitulation, some could say bitcoin is currently going through a time-based capitulation, somewhat similar to 2018 (before its drop from $6k to $3k). And to add a final medium-term bearish confluence, the miner position index (MPI) is slightly higher than in June, which just shows they are not convinced enough to keep adding to their portfolios.