Bitcoin (BTC) has seen impressive price gains recently, but a leading quant analyst believes the cryptocurrency still has room to rise. Despite some recent sideways movement, Bitcoin’s price could continue its upward trajectory, as short-term holders (STHs) are not yet showing signs of significant profit-taking that would signal a market top.

What Is the Bitcoin Short-Term Holder SOPR?

The key to understanding why Bitcoin still has potential for growth lies in a crucial on-chain metric: the Spent Output Profit Ratio (SOPR) for short-term holders. The SOPR is an indicator that helps analysts determine whether Bitcoin investors are selling their coins at a profit or a loss. By assessing each transaction’s history and comparing the selling price to the original purchase price, the SOPR shows how much profit or loss is being realized in the market.

For the current discussion, the SOPR for short-term holders (those who purchased Bitcoin in the past 155 days) is of particular interest. This cohort tends to be more reactive to market changes, selling off their holdings whenever there is a price rally or crash. Understanding their behavior is key to predicting Bitcoin’s next move.

Short-Term Holder SOPR Indicates Profit-Taking, but Not Overheated

The Bitcoin STH SOPR has remained above the 1 mark for the past few months, signaling that short-term holders have generally been selling at a profit. In other words, this group is capitalizing on the recent price increases, realizing profits as Bitcoin surges.

However, as the chart from Crypto Quant shows, while the SOPR has risen sharply during the recent rally, it is still far from the euphoric levels typically seen at market tops. Historically, when this metric reaches extreme levels, it often signals that the market is overheated and due for a correction. In the current scenario, however, the SOPR is still well below these levels, suggesting that Bitcoin has not yet reached the point of excessive profit-taking.

What Does This Mean for Bitcoin’s Price?

Despite the increasing STH SOPR, Bitcoin’s price is still within a zone where local tops have typically formed. For example, a high earlier this year coincided with similar levels in the SOPR, but the market did not immediately reverse into a sharp downturn. The key question now is whether there is enough market demand to absorb the profit-taking from the short-term holders or if a market top is approaching.

At the moment, Bitcoin has been trading sideways around $90,400, reflecting a bit of a lull after the recent rally. However, if demand continues to outpace selling pressure, Bitcoin could push through this period of profit-taking, allowing the price to rise further.

Conclusion: Bitcoin’s Path Forward

While the SOPR for short-term holders suggests that there is profit-taking happening in the market, it is still far from signaling an impending market top. Bitcoin’s price could still have room to rise if demand remains strong enough to absorb these profits. Traders and investors should keep an eye on the STH SOPR as a key indicator in the coming weeks, as it could help signal whether Bitcoin is headed for a correction or if its bullish momentum will continue.