The on-chain data indicates that Bitcoin’s long-term holder capitulation is increasing in recent months, although it hasn’t reached the historic bottom zone.
Bitcoin Long-Term Holder SOPR Continues To Observe Deep Values Below ‘1’
An analyst explained that BTC long-term owners have suffered losses in the last few weeks, as CryptoQuant posted.
The “spent output profit ratio” (or SOPR in short) is an indicator that tells us whether Bitcoin investors are currently selling at a profit or at a loss.
This metric is based on checking each coins’ online history to determine the last sale price. The coin is considered to have been sold for profit if its last selling price was lower than the BTC current price.
Can This Bitcoin Ratio Have Hints For A Bottom?| Can This Bitcoin Ratio Have Hints For A Bottom?
However, if the price of the coins was higher than that at the moment it would indicate that the coin suffered some losses.
If the SOPR exceeds one it indicates that the entire Bitcoin market is making some profit at the moment. A value lower than one indicates that BTC investors are losing money.
“Long-term holder” group includes all BTC investors that held their coins for at least 155 days before selling or moving them. This chart shows you the trends in the 14-day MASOPR, which is only for LTHs.
Recent decline in the value of this metric is evident. Source: CryptoQuant| Source: CryptoQuant
The graph above shows that the quant marked the trend points for the long-term 14-day MA Bitcoin holder SOPR.
It seems like the major bottoms in the history of the crypto were formed whenever the indicator’s value sank to a value of around 0.48 (denoted by the green line in the chart).
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When LTHs enter deep capitulation, this kind of value is achieved. This is the BTC group least likely to buy at any given point. Large losses from them could indicate that the bear top is near.
The indicator currently is below 1 but still holds a value around 0.62 which is a little higher than its historical bottom. This would suggest that while Bitcoin may be heading towards a bottom, it’s not quite there yet.
BTC price
At the time of writing, Bitcoin’s price floats around $19.4k, down 9% in the past week. This chart displays the trends in cryptocurrency’s price over the past 5 days.
It seems like the cryptocurrency's price has been trending sideways for the past few days. Source: TradingView.| Source: BTCUSD on TradingView
Featured image by Brent Jones, Unsplash.com. Charts from TradingView.com and CryptoQuant.com.