Post-Fed Rally Fades Into Selling Pressure on Bitcoin

Last week, Bitcoin surged past $117,000 after the U.S. Federal Reserve announced a rate cut. However, renewed selling pressure quickly emerged, dragging the leading cryptocurrency down to around $112,000 at the start of this week.

Adding to investor unease, history shows that September has often been a weak month for crypto markets, with past cycles delivering sharper corrections during this period.

1. SOPR Signal: Profitability on the Decline

Wedson highlighted the Spent Output Profit Ratio (SOPR) as the first red flag. This on-chain metric measures whether transactions are being executed at a profit or a loss:

• Above 1: sellers are in profit

• Below 1: sellers are at a loss

Currently, SOPR remains above 1, yet its downward trend indicates weakening profitability on the blockchain.

“The SOPR signal is an excellent tool to detect when profitability is starting to fade. Never before in Bitcoin’s history have investors accumulated this late in the cycle and at such elevated price levels,” Wedson explained.

2. Short-Term Holder Risk Zone for Bitcoin

The second indicator Wedson flagged is the realized price for short-term holders (STH), which now stands near $111,400.

Should Bitcoin dip below this threshold, it could trigger stop-loss liquidations from short-term investors, potentially accelerating a sell-off.

3. Sharpe Ratio Weakens Despite Higher Prices

Finally, Wedson pointed to the Sharpe ratio, which measures risk-adjusted returns. Despite Bitcoin’s higher price levels compared to previous cycles, the ratio has declined.

This suggests that the reward for risk taken is diminishing, limiting Bitcoin’s overall profit potential in the current environment.

Could Altcoins Steal the Spotlight?

While these three indicators paint a bearish picture for Bitcoin, Wedson emphasized that market enthusiasm might not vanish altogether. Instead, he argued that a renewed wave of investor interest could shift toward altcoins, rather than being driven by Bitcoin itself.

*This content is not an investment idea.

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What is the Stablecoin Ratio Channel? 

The Stablecoin Ratio Channel tracks the ratio between Bitcoin’s market cap and the supply of stablecoins. This ratio is used to assess market liquidity and investor risk appetite. The short-term version of the SRC is sensitive to sudden changes in Bitcoin’s price and indicates whether selling pressure is increasing. 

What Do Short-Term Indicators Say? 

According to Alphractal, the short-term version of the SRC currently signals increasing selling pressure. This coincides with Bitcoin facing strong resistance in the $113,000–$114,000 range. Investors appear to be shifting from BTC to stablecoins at these levels. 

Long-Term Outlook 

On the other hand, the long-term SRC indicator is only halfway through its cycle. In past market cycles, this level typically signaled healthy corrections in bull markets and selling pressure in bear markets. According to the long-term version of the SRC, Bitcoin is still in the middle of a bull cycle. The trend has not yet reached its peak. Therefore, Alphractal analysts interpret the current situation not as negative but as a potential reaccumulation phase. 

According to CryptoQuant data, Bitcoin’s Exchange Stablecoins Ratio has risen to 5.3. This means that BTC reserves on exchanges are five times higher than stablecoin reserves, suggesting that potential selling pressure may outweigh buying pressure. 

According to Alphractal’s analysis, there is increasing short-term selling pressure on Bitcoin (BTC). However, long-term indicators suggest we are still in the middle of a cycle, and these levels have historically signaled healthy corrections. 

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The post Alphractal Warns of Bitcoin Selling Pressure appeared first on Coin Engineer.