While cryptocurrency market sell-off slows down, this group of traders might be guilty of crashing the market
According to data provided by Glass knot, short-term traders were the most active sellers in the market during yesterday’s steep decline.
Who shorted the market?
On the provided chart, users could see that the Spent Output Profit Ratio of short-term Bitcoin holders has strongly decreased, signaling that most short-term holders of Bitcoin “panic sold” right after the first cryptocurrency retraced a couple of percentage points.
The traders who are currently at a loss are most likely retail or private traders who bought the cryptocurrency just at or near the top. After these traders’ markets sold Bitcoin, a cascade of liquidations took place in the derivatives market.
The SOPR indicator
The SOPR is a relatively simple on-chain data indicator that can reflect the current benefit of each exit on the blockchain or simply determine the ratio between the price of a buy order and the price of a sell order.
If the SOPR value is greater than one, it means that a trader exited the market with a gain. In this case, most of the short term traders exited at a loss, which usually means that they will look at the entry when the price hits its exit point. According to market data, the greatest selling pressure was around $ 56,000 to $ 55,000.
Current market structure
As for now, Bitcoin is going through a slight recovery by gaining back 2.1% of its value, while losing around 8.7% the previous day. The Bitcoin sell-off has begun in accordance with a global financial market correction, caused by new pandemic measures that countries are currently taking.
