On-chain data shows that bitcoin long-term holders have reached the deepest value since SOPR 2019, indicating that this group has recently realized some heavy losses.
Bitcoin Long-Term Holder SOPR Continues Downward Trend
As one analyst in a Cryptoquant post pointed out, BTC long-term holders are currently experiencing the largest amount of losses since 2019.
The “Spent Output Profit Ratio” (or SOPR for short) is an indicator that tells us whether bitcoin investors are currently selling at a profit or loss.
The metric works by checking the transaction history of each coin sold to see what price it was previously carried.
If the final selling price of a coin was higher than the current price, then that particular coin realized some amount of loss. Whereas if the previous value was lower than now, the coin naturally went into profit.
When the SOPR value is greater than one, it means that investors as a whole are currently selling at a profit.
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On the other hand, a ratio value less than one means that the overall market is currently experiencing losses.
The “Long Term Holder” (LTH) group includes all investors who held their coins for at least 155 days before selling or transferring them.
Now, here is a chart that shows the trend in Bitcoin SOPR specifically for these LTHs:
The value of the metric seems to have been going down in recent weeks | Source: CryptoQuant
As you can see in the above graph, the Bitcoin LTH SOPR has been below one recently, and its value has declined further.
This means that in response to the latest crash in the price of crypto, these traders have panicked and started selling at a loss.
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Most recently, the value of the metric touched lows not seen since 2019. This shows that right now the LTH cohort is suffering the largest amount of losses in more than three years.
Long-term holders realizing such high losses could be a sign that the bottom is approaching Bitcoin.
At the time of writing, the price of bitcoin is around $20.7k, down 12% over the past seven days. In the past month, crypto has lost 31% in value.
The chart below shows the coin’s price trend over the past five days.
Looks like the value of the crypto has rebounded back over the last couple of days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com