This is why Bitcoin’s undervaluation persists, despite profit-making, according to THIS indicator

Key Points

• Bitcoin’s Short-Term Holder Spent Output Profit Ratio (STH-SOPR) indicates a possible profit-taking phase.
• MVRV-Z Score suggests Bitcoin is undervalued, pointing to a potential long-term rally.

Bitcoin [BTC] has shown impressive performance, breaking past the $85K-$70K accumulation range to regain the $100K milestone.

As per previous analysis backed by CryptoQuant data, this was a strong zone for accumulation. However, as the market evolves, it may be time to rethink strategies. Indications are that a profit-taking phase may be on the horizon as investors seek to gradually and strategically distribute their positions.

Short-term Holder Data Indicates Profit-taking Phase

The Short-Term Holder Spent Output Profit Ratio (STH-SOPR) is a crucial on-chain tool for monitoring profit-taking activity among short-term Bitcoin holders. When the STH-SOPR enters the red zone, it usually signals increased selling near local market peaks.

This doesn’t necessarily imply that Bitcoin’s rally is ending, but it does suggest a high probability zone for gradual profit-taking. Historical market cycles reveal that red SOPR readings often correspond with euphoric phases.

For Bitcoin investors holding spot positions, it may be a good time to devise a structured, step-by-step selling strategy. This approach would favor a strategic exit over an emotional one.

Typically, savvy investors offload 10–20% at key price milestones, providing the “ammo” to sell at higher levels if the rally continues, while also securing gains along the way.

As large investors implement these strategic profit-locking moves, a short price correction to test the $100k demand zone could be engineered before a further Bitcoin rally.

MVRV Z-score Suggests Room for Further Rally

Many analysts recommend a gradual position exit, which could soon affect Bitcoin’s price action. To support this, the MVRV-Z Score was paired with STH-SOPR. This metric compares market value to realized value, helping identify potential overvaluation.

Currently, the MVRV-Z Score is just 2.3—far below the “overvalued” danger zone of 7+. This strengthens the case for a measured distribution of Bitcoin.

The market may continue to rise, but the current SOPR red zone provides Bitcoin investors with a rational point to start securing profits.