A recent assessment appeared to indicate that long-term Bitcoin holders are slowly pulling out of their deep gains, and this could affect prices either way depending on further developments.
A long-term holder’s average monthly SOPR is less than 1
In a recent QuickTake post on CryptoQuant, blockchain analyst Darkfost suggests that long-term Bitcoin holders are entering a fragile phase in the current cycle. This post is based on readings from the BTC: Long-Term Holders (LTH) SOPR metric, which tracks whether coins moved by long-term holders are profitable or at a loss.
A SOPR value above 1 reflects that holders of this category are making profits on average, while a reading below 1 indicates that these coins are trading at a loss. According to Darkfost, current readings from the SOPR metric have fallen to a critical level of 1 and are currently sitting around 0.98.
This is a sign that Bitcoin LTHs, which are usually the strongest investor’s hand in the market, are starting to lose monthly. Interestingly, the scenario is slightly different in the annual period.
Annual LTH SOPR is still positive, but the trend is declining – Analyst
Darkfost further highlights that although the monthly timeframe is leaning into the red zone, the annual SOPR is still in positive territory with readings of around 1.84. According to the analyst, this is about 84% of the average profit obtained.
However, the annual profit took a downward trend and gradually decreased. It is worth noting that the LTH SOPR has not been higher than 3.4 on the charts during the current period, which is about half of the readings seen at the peak of the previous period. Interestingly, this is also less than four times the peak of the previous two periods, indicating a narrower distribution of momentum among this group of investors.
Furthermore, Darkfost produces historical data showing that bear markets have formed only after the SOPR has fallen to the 0.6 region, a level consistent with an average realized loss of around 40%. Therefore, while the current reading on the metric is below 1 per month, it is still far from the surrender zone.
Currently, long-term holders have entered a transition phase. In a scenario where the Long Holder realizes that his profits are declining, the selling pressure may in turn decrease from that side. As of this writing, the price of Bitcoin is around $64,247, reflecting a loss of 4.85% over the previous day.
