The data shows that long-term bitcoin holders have realized significant losses recently, suggesting that the eventual capitulation before the bottom may be here.
Long-term Bitcoin holder SOPR shows average losses of 27% achieved this week
According to the latest weekly report from glassLong-term holders of Bitcoin seem to have taken some losses this week.
The “Profit ratio of the output spent“(or SOPR for short) is an indicator that tells us whether Bitcoin investors are selling at a profit or a loss at the moment.
The metric works by looking at the chain history of each coin being sold to see what price it last moved at. If this price is lower than the current price, the coin was sold at a profit.
On the other hand, the most recent selling price in excess of the most recent means that the currency has been sold at a loss.
When the values of Bitcoin SOPR are greater than one, it means that the coins that are now moving, on average, are selling at a profit.
While the value of the index is less than one it indicates that the overall market is selling at a loss at the moment. Of course, a ratio that is exactly 1 means that investors are breaking out on average.
Now, here’s a chart showing the trend in Bitcoin SOPR for long term ownersa group that holds its coins for at least 155 days before selling.
Looks like the 7-day average value of the metric has sunk recently | Source: Glassnode's The Weekly Update - Week 22, 2022
As you can see in the chart above, long-term bitcoin holder SOPR has noticed negative value over the past week.
The current value of the index indicates that every LTH coin spent in the past seven days has experienced an average loss of 27%.
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The report notes that in the history of the currency, similar values of the scale were observed only during the lowest levels of the final capitulation of bear markets.
This may indicate that the current Bitcoin market may also be approaching the bottom. However, during 2015 and 2018, LTH SOPR fell deeper and the price corrected further before reaching the lowest level.
At the time of writing this report, Bitcoin price It is floating around $31.7K, up 9% in the past seven days. Over the past month, the cryptocurrency has lost 18% of its value.
The chart below shows the currency price trend over the past five days.
The value of Bitcoin seems to have shot up over the past couple of days | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, Glassnode.com