Why Pain May Not Be Over For Bitcoin Holders Just Yet

The previous trend for Bitcoin long-term SOPR (EMA 30) holders may indicate that BTC holders may face more pain in the coming months.

Bitcoin Long-Term Holder SOPR Drops Below “One” Lately

As explained by an analyst at CryptoQuant MailBTC investors may continue the frustrating few months if history is anything to go by.

The “Output profit rate“(or SOPR for short) is an indicator that tells us whether bitcoin investors are selling at a profit or at a loss at the moment.

The metric works by looking at the transaction history of each coin sold in the chain, to see what price it was last quoted.

If the previous sale price of any coin is lower than the current value of BTC, the coin has just been sold to make a profit.

On the other hand, a past value greater than the last price of the cryptocurrency means that the coin has moved at a loss.

When the value of the SOPR is greater than one, it means that the total Bitcoin market is selling at a profit at the moment.

Related reading | Bitcoin Coinbase Premium Gap Close to Zero, Sale Ending?

On the other hand, index values ​​less than one indicate that investors as a whole are aware of some loss at the moment.

right Now , “long-term pregnantThe (LTH) group includes any Bitcoin investor who has held their coins for at least 155 days without moving or selling.

The chart below shows the trend in SOPR throughout the history of the cryptocurrency specifically for these LTHs.

SOPR Bitcoin Long Term Holder

Looks like the 30-day exponential-MA value of the indicator has gone down recently | Source: CryptoQuant

In the above chart, Quantum has highlighted all relevant areas of the Bitcoin long-term SOPR bearer trend.

It appears that during previous lows, the index’s EMA-30 value fell below one and trended sideways there for a while (except for the COVID-19 crash, where the gauge didn’t stay in the area for very long).

Related reading | Bitcoin Whale Presence on Derivatives Still High, Is There More Volatility in the Future?

Recently, the value of LTH SOPR again fell below one, indicating that holders of LTH SOPR are aware of the losses at the moment.

The analyst notes that while these capitulation events have historically led to bottom formations, it may take some time, even months, before an actual bottom is found.

BTC price

At the time of writing this report, Bitcoin price It is floating around $21.4K, up 11% in the past week. Here is a graph showing the trend in the value of the currency over the past five days:

Bitcoin price chart

The price of the coin seems to have surged up over the last few days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com

Leave a Comment

Your email address will not be published.