Is Bitcoin facing a short-term pullback? Long-term holder SOPR and Whale activity suggest a potentially healthy market correction.

The price of Bitcoin (BTC) continues to hold above $117,500, but internal signals suggest a possible pullback in the short term. The SOPR (Spent Output Profit Ratio) of long-term holders and changes in whale activity both indicate that the market may face adjustment pressure. Historical data also shows that such signals typically herald an impending healthy price correction.

Long-term holder SOPR: Potential sell signal As of July 21, the SOPR of long-term Bitcoin holders (those holding Bitcoin for more than 155 days) is 1.96, indicating that these holders are selling their Bitcoin at nearly double the cost. Although a single number is not enough to raise alarms, historical data shows that an increase in SOPR often leads to a price pullback.

Historical Review:

• On February 9, SOPR reached 5.77, Bitcoin dropped from $96,479 to $84,365, a decline of 12.55%.

• On June 13, SOPR was 3.47, Bitcoin dropped from $106,108 to $101,003, a decrease of 4.81%.

• Since July 9, SOPR has experienced several peaks, at 3.90, 3.25, and 3.50 respectively. On July 4, SOPR broke through 24, but the Bitcoin price did not significantly pull back, suggesting a potential delayed reaction in the market, increasing the risk of an impending pullback.

  

Whale to exchange ratio rises again The Whale to Exchange Ratio (W2E Ratio) reflects the activity of large holders transferring Bitcoin to exchanges. Historically, whenever this ratio reaches or exceeds the price trendline, it is usually accompanied by a price pullback. Recent examples include two instances:

• June 28: W2E ratio is 0.608, Bitcoin price is $107,351, and a few days later the price pulled back to $105,727.
• July 16: The W2E ratio is 0.649, the Bitcoin price is $118,682, then the price stagnates and shows weakness.

These signals suggest that, despite the surface stability of the spot market, whale activities indicate that the market may face selling pressure.

Bitcoin Price Structure: Test of Key Support Levels The current Bitcoin price is fluctuating around $117,500. Since July 12, Bitcoin has tested and held multiple times in the $116,456 area, which coincides with the 0.236 Fibonacci retracement level of the recent rise from $98,230 to $122,086. This area has become an important support level for the price, and if the price falls below this area, it may open up deeper downward space.

• The strong support level is around $107,343, which is at the 0.618 Fibonacci retracement level. This support is often regarded as the "golden pocket" in a pullback, and if it breaks, the market may enter a deeper adjustment phase.
• If the price falls below $107,343, the next support level may appear around $103,355, representing a 12% pullback from the current price. Similar adjustments occurred on February 9 when SOPR surged.

However, if Bitcoin can break through $122,086 and stabilize at that level, especially with the SOPR cooling down and the whale to exchange ratio decreasing, the market may regain upward momentum, further driving up the price.

Conclusion: Although the current price of Bitcoin remains high, multiple signals indicate that the market may face pullback risks. Investors should pay attention to the performance of SOPR, Whale activity, and key support levels to be prepared for market adjustments.