Bitcoin dropped below $21k over the past 24 hours as evidence of profits being harvested by long-term owners is evident on-chain.
SoPR has risen in recent days to become a long-term Bitcoin holder
CryptoQuant analyst points out that long-term investors have profited from the rise in crypto prices.
The relevant indicator here is the “Spent Output Profit Ratio,” which tells us whether the average Bitcoin investor is selling at a profit or at a loss right now.
This metric indicates that the total value is higher than 1. It means that the entire group of holders has realized some profits.
Conversely, SOPR values lower than the threshold mean that the entire market is currently selling at a loss.
BTC investors who have values that are exactly one and less than one indicate they just make a profit on selling.
Now, there is a Bitcoin cohort called the “long-term holders” (LTHs), which include all investors who have been holding onto their coins since at least 155 days ago, without having moved or sold them.
This chart shows how the trend has been in the SOPR over the last few weeks for this BTC-holder group.
Source: CryptoQuant| Source: CryptoQuant
The graph above shows that the LTH SOPR spiked above 1 in the past few days. This suggests that the holders are making some profit.
Also, the chart highlights instances where the indicator reached high levels in the previous two weeks. The chart shows that whenever the indicator has reached very high levels during this time period, the cryptocurrency price has seen a local peak either simultaneously or soon after.
The LTH SOPR Values have increased recently and a top formation may be held for BTC if there is a continuation of the current trend.
Bitcoin is now below $21k, despite being above that level for the weekend.
BTC price
At the time of writing, Bitcoin’s price floats around $20.7k, up 1% in the last week. The crypto’s value has increased by 3% over the last month.
Below is a chart showing the change in coin price over the past five days.
Crypto seems to be losing value over the past 24 hours. Source: TradingView's BTCUSD.| Source: BTCUSD on TradingView
Featured image by Andy Holmes, Unsplash.com; charts from TradingView.com. CryptoQuant.com
