Glassnode data shows that the most recent sales from Bitcoin long-term owners have come from people who purchased at higher prices than the hodlers who got in during 2017-2020.
The Average Loss for Bitcoin Long-Term Holders Is 33%
According to the most recent weekly Glassnode report, SOPR is a BTC long-term holder who has seen a decrease in value over the past weeks.
The “spent output profit ratio” is an indicator that tells us whether Bitcoin investors are selling at a profit or at a loss right now.
If the ratio’s value is higher than 1, it indicates that the entire market is making a profit. On the other hand, the indicator’s value being less than one implies the investors are realizing some loss on average currently.
Naturally, the metric’s value being exactly equal to one suggests the market is just breaking even at the moment.
The “long-term holder” group is a cohort that includes all investors who held their Bitcoin for at least 155 days before selling.
This chart shows how the SOPR has changed over the last decade, with an emphasis on these LTHs.
The indicator seems to have a declining value. Source: Glassnode's The Week Inchain Week 28 2022| Source: Glassnode's The Week Onchain - Week 28, 2022
You can see that Bitcoin’s long-term investors have suffered an average loss (33%) in recent days, as shown in the graph.
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However, as the below chart shows, the average cost basis of the LTHs is around $22.3k, which is only around 6% below the BTC price at the time the report came out (it’s now 10% at the current rate).
The BTC market seems to have fallen below the LTH price basis in recent weeks | Source: Glassnode's The Week Onchain - Week 28, 2022
LTHs are selling for an average 33% loss, despite their cost basis placing them just 10% below the surface. This means that most of the selling activity has been from hodlers who purchased during recent highs.
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LTHs with Bitcoin accumulated in the 2017-2020 cycles or earlier are likely to still hold on to their Bitcoin.
BTC Prices
At the time of writing, Bitcoin’s price floats around $19.7k, up 1% in the last seven days. The crypto’s value has dropped 31% over the last month.
The chart below shows how the currency’s price has changed over the course of five days.
Source: BTCUSD on TradingView| Source: BTCUSD on TradingView
Featured image by Kanchanara at Unsplash.com. Also charts from TradingView.com. Glassnode.com.