On-chain data shows that the Bitcoin holder’s long-term capitulation has deepened recently, but has not yet entered historical bottom territory.
Bitcoin long-term SOPR holder continues to monitor deep values below ‘1’
As explained by an analyst at CryptoQuant MailIn recent weeks, long-term BTC holders have been losing ground.
The “Output profit rate“(or SOPR for short) is an indicator that tells us whether Bitcoin investors are currently selling at a profit or a loss.
The scale works by checking the sequential history of each coin being sold to see what price it was last moved at. If the last sale value of any coin is lower than the current BTC price, then that coin has now been sold at a profit.
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On the other hand, the previous price more than the current price means that the currency has realized some loss.
When the SOPR is greater than one, it means that the general Bitcoin market is reaping some profits at the moment. On the contrary, a value lower than that indicates a loss among BTC investors at the moment.
The “Long Term Owner” group includes all BTC investors who held their coins for at least 155 days before selling or transferring them. The chart below shows the trend in the 14-day SOPR specifically for these LTH items:
The value of the metric seems to have been going down recently | Source: CryptoQuant
As you can see in the chart above, Quantum has identified all relevant trend points for the 14-day moving average SOPR of Bitcoin.
It appears that major troughs in cryptocurrency history were formed when the value of the index fell to a value of around 0.48 (indicated by the green line in the chart).
Related reading | $15,000 Possible Bitcoin Bottom? So says “Delta Cap”
This type of value occurs when LTHs go into deep surrender. Since this is the group of BTC that is least likely to sell at any time, a significant loss from it could indicate that Bottom bearing Approaching.
Currently, the index is also below 1, but its value is still around 0.62, slightly above its historical bottom area. This may indicate that while Bitcoin may be heading towards the bottom, it is not there yet.
At the time of writing this report, Bitcoin price It is floating around $19.4K, down 9% in the last week. The chart below shows the trend in the value of the cryptocurrency over the past five days.
Looks like the price of the coin has been moving sideways over the last few days | Source: BTCUSD on TradingView
Featured image from Brent Jones on Unsplash.com, charts from TradingView.com, CryptoQuant.com