Bitcoin Short-Term Holders Profit Ahead of Fed Meeting → Insights

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Briefing

Bitcoin’s short-term investors are showing renewed confidence, with on-chain data indicating they are now profitable ahead of the Federal Reserve’s upcoming meeting. This suggests a collective anticipation of a positive market reaction, as the Spent Output Profit Ratio (SOPR) for recent buyers has bounced, and Bitcoin has reclaimed the crucial cost basis range of sub-3-month holders, specifically between $111,800 and $114,200.

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Context

As the Federal Reserve’s FOMC meeting approaches, many are wondering about the immediate future of Bitcoin → Is the market bracing for volatility, or are investors positioning for a sustained rally? This data helps answer whether recent market participants are feeling confident or fearful about upcoming economic news.

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Analysis

The Spent Output Profit Ratio (SOPR) is a key on-chain metric that measures whether the average Bitcoin transaction is being spent at a profit or a loss. A SOPR value above 1 indicates that coins are being sold for a profit, while a value below 1 suggests losses. When the SOPR for short-term holders → those who bought Bitcoin within the last 155 days → bounces and stays above 1, it means that these recent buyers are collectively in profit. This signals renewed confidence, as their investments are currently yielding positive returns.

Concurrently, Bitcoin’s price has moved above the average price at which these short-term holders acquired their coins, known as their cost basis, specifically between $111,800 and $114,200. This pattern suggests that a significant cohort of recent investors is no longer underwater, contributing to a more bullish sentiment in the market ahead of the Fed’s decision.

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Parameters

Key Metric → Spent Output Profit Ratio (SOPR) for recent buyers
Observed Pattern → SOPR bounced, short-term holders in profit
Core Data Point → BTC reclaimed sub-3-month holder cost basis ($111,800 – $114,200)
Timeframe → Ahead of “this week’s” Federal Open Market Committee (FOMC) meeting
Source → Glassnode on-chain data

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Outlook

This insight suggests a near-term bullish bias among short-term Bitcoin investors, driven by their current profitability and the anticipation of a favorable outcome from the Fed meeting. For this confidence to endure, Bitcoin must maintain its price above the $111,800 – $114,200 range post-Fed decision. A failure to hold this level could trigger a “sell the news” event, signaling a reversal of the current optimistic sentiment. Investors should monitor Bitcoin’s price action immediately following the FOMC announcement as a confirming or counter-signal to this trend.