The past trend of long-term Bitcoin holder SOPR (EMA 30) may suggest that BTC holders may face more pain in the coming months.
Long-term bitcoin holder SOPR recently fell below the “one” mark.
As one analyst explains in a CryptoQuant article, BTC investors could have a frustrating few months if history is any indication. On the same subject : Good news for cryptocurrencies: US lawmakers oppose SEC move to expand cryptocurrency enforcement unit..
The “spent output profit ratio” (or SOPR for short) is an indicator that tells us if bitcoin investors are selling at a profit or a loss right now.
The measurement system works by looking at the transaction history of each coin sold on the chain, to see what price it was last sold for.
If the previous sale price of a coin was lower than the current value of BTC, then the coin has just been sold at a profit.
On the other hand, if the past value is higher than the last price of the cryptocurrency, it means that the coin has moved at a loss.
When the SOPR value is greater than one, it means that the overall bitcoin market is selling for profit right now.
On the other hand, indicator values below one imply that investors as a whole are making some loss at this time.
Now, the group of “long-term holders” (LTH) includes any bitcoin investor who has held their coins for at least 155 days without moving or selling them.
The graph below shows the evolution of SOPR over the history of the crypto specifically for these LTHs.
In the chart above, the quant has highlighted all relevant trending regions for the long-term Bitcoin holder SOPR.
It seems that during previous lows, the indicator’s EMA-30 value has broken below 1 and trended sideways for some time (with the exception of the COVID-19 crash, where the metric does not did not stay in the area too long).
Recently, the value of SOPR LTH has once again moved below one, suggesting that long-term holders are making losses right now.
The analyst notes that while such capitulation events have historically led to bottoms forming, it may still be some time, if not months, before a bottom is actually found.
As of this writing, bitcoin price is floating around $21.4k, up 11% over the past week. See also: Bexplus offers 100x Leverage Crypto Trading and doubles your deposit. Here is a chart that shows the trend of the coin’s value over the past five days: