On-chain data shows that long-term Bitcoin holders SOPR has reached its highest value since 2019, suggesting that this group has realized some significant losses recently.
Bitcoin Long-Term Holder SOPR Continues Its Downtrend
As one analyst in CryptoQuant pointed out postalBTC long-term holders are currently posting their biggest losses since 2019.
This”Input-output profit margin” (or SOPR for short) is an indicator that tells us whether Bitcoin investors are now selling at a profit or at a loss.
This indicator looks at the previous price of each coin sold by examining its transaction history.
If the last sale price of any coin is higher than the current price, then there is a certain amount of loss for that particular coin. And if the previous value is less than the current value, then the coin will naturally profit.
When the value of SOPR is greater than 1, it means that the investor as a whole is now selling at a profit.
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On the other hand, a ratio value of less than 1 means that the entire market is currently losing money.
This”long term holder” (LTH) group includes all investors who hold tokens for at least 155 days before selling or transferring tokens.
Now, here is a chart showing Bitcoin SOPR trends, specifically for these LTHs:
The value of the metric seems to have been going down in recent weeks | Source: CryptoQuant
As you can see in the graph above, Bitcoin LTH SOPR has been below 1 recently and its value has been falling further.
This means that in response to the latest plunge in cryptocurrency prices, these hodlers have panicked and started selling at a loss.
Related reading | TA: Bitcoin recovery stalled near key juncture, key resistance intact
Recently, the metric’s value hit a low not observed since 2019. This suggests that the LTH cohort is currently suffering its biggest loss in more than three years.
Long-term holders are aware that such high losses could be a sign that Bitcoin’s bottom may be getting closer.
As of this writing, price of bitcoin Floating around $20.7k, down 12% over the past 7 days. The cryptocurrency has lost 31% in value over the past month.
The chart below shows the trend of the coin’s price over the past five days.
Looks like the value of the crypto has rebounded back over the last couple of days | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com