Bitcoin long-term holders capitulate near bottom zone, but not quite there

On-chain data shows that the capitulation of long-term Bitcoin holders has deepened recently, but it has not yet entered the historical bottom area.

Bitcoin Long-Term Holder SOPR Continues to Observe Depth Values ​​Below ‘1’

As one analyst in CryptoQuant explained postallong-term BTC holders have been losing money in recent weeks.

This”Input-output profit margin” (or SOPR for short) is an indicator that tells us whether Bitcoin investors are currently selling at a profit or at a loss.

This indicator looks at the price of each sold coin’s last move by examining its on-chain history. If any coin’s last sale price was lower than the current BTC price, that coin has now been sold for profit.

Related reading | Could this Bitcoin ratio hint at a bottom?

On the other hand, the previous price higher than the current price means that the coin has realized some losses.

When SOPR is greater than 1, it means that the entire Bitcoin market is currently reaping some profits. Conversely, a value below that means BTC investors are currently incurring losses.

The “Long-Term Holders” group includes all BTC investors who held their tokens for at least 155 days before selling or transferring the tokens. The chart below shows the trend of the 14-day MA SOPR specifically for these LTHs:

The value of the metric seems to have been going down recently | Source: CryptoQuant

As you can see in the chart above, quant has marked all relevant trend points for the 14-day MA Bitcoin long-term holder SOPR.

Whenever the value of the indicator drops to around 0.48 (represented by the green line in the chart), it appears to have formed a major bottom in crypto history.

Related reading | Could Bitcoin bottom out at $15,000? “Delta Hat” says so

This value occurs when LTH falls into deep capitulation.Since this is the least likely group of BTC to sell at any time, the large losses they realize may indicate that bear bottom Coming.

At present, the indicator is also below 1, but still has a value of around 0.62, which is slightly higher than the historical bottom area. This suggests that while Bitcoin may be heading towards a bottom, it is not quite there yet.

BTC price

As of this writing, price of bitcoin Floating around $19,400, it’s down 9% over the past week. The chart below shows the trend in the value of cryptocurrencies over the past five days.

Bitcoin Price Chart

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

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