The Bitcoin price is dropping to $40k. On-chain data indicates that some long-term Bitcoin owners have made some recent profits.
The SOPR Bitcoin Long-Term Holder Shows Some Recent Spikes
A CrypoQuant analyst points out that some BTC-long-term owners may have taken part in profit-taking over the previous day.
Here, the relevant indicator is the spend output profit ratio (or in short the SOPR), which gives us information about the overall profit ratio for the Bitcoin market.
This metric is based on looking at the previous history of the coins being sold to find out what their prices were. The coin will move at profit if the previous price is lower than the current.
The investor may also sell this coin at loss if its current price is greater than it currently is. If the value of SOPR exceeds one it indicates that investors are on average selling at profit.
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On the other hand, when the indicator’s value is less than one, it implies investors are selling at a loss overall at the moment. Naturally, a SOPR value equal to 1 means that the market is only breaking even.
A version of this Bitcoin indicator takes into account only those coins that hadn’t moved for at least 155 days before being sold. LTHSOPR is the acronym for long-term holders. This supply comes from the long-term holder.
Below is a chart that shows how the BTC SOPR has changed over the past month.
It seems that the indicator's value has risen in recent months | Source: CryptoQuant
This graph shows the spikes that Bitcoin LTHSOPR has experienced. These points are where long-term investors look to have collected some profit.
This has been a common trend that is bearish. The chart shows how the price struggled to recover after large spikes.
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So, it’s not surprising that the price of the crypto crashed down to $40k shortly after the latest spike in the indicator.
BTC Prices
At the time of writing, Bitcoin’s price floats around $40.3k, down 7% in the last seven days. The crypto’s value has fallen 5% over the last month.
The chart below shows how the currency’s price has changed over the past five days.
BTC seems to be in a downward trend over the last twenty-four hour | Source: BTCUSD on TradingView
A few days ago, Bitcoin’s price seemed close to $45k. But, over the last day, it has plummeted to $40k.
Unsplash.com's featured image. Charts by TradingView.com. CryptoQuant.com chart.