This on-chain metric suggests Bitcoin is still only 1/3 into a bear market

Bitcoin long-term holder SOPR may suggest the cryptocurrency is still only a third off in the recent bear market.

Bitcoin’s 20-day SMA long-term holder SOPR is only 86 days into bottoming territory

As one analyst in CryptoQuant pointed out postalthe cryptocurrency is still only 1/3 of the 260-day average historical bottoming period.

The relevant metric here is “cost output profit margin” (or SOPR for short), which tells us whether the average Bitcoin investor is now selling at a profit or at a loss.

This indicator understands the price of the last move of each coin sold on-chain by looking at its history. If this previous sale price is lower than the latest BTC value, then the coin has just been sold at a profit. And if the last value is greater than the current value, then that particular coin realized some loss.

When the value of SOPR is greater than 1, it means that the entire market is now selling at a profit.

On the other hand, a metric of less than 1 means that the average holder is currently transferring tokens at a loss.

“Long Term Holders” (LTHs) are the Bitcoin group that includes all investors who hold their tokens for at least 155 days without selling or moving them.

Now, here’s a chart showing the BTC SOPR (20-day MA) trend for these LTHs over the past few years:

Looks like the value of the metric has been pretty low recently | Source: CryptoQuant

As you can see in the chart above, Bitcoin LTH SOPR (20-day SMA) fell below the “one” mark a while ago.

Also, in the chart, Quant has marked all relevant trend areas for bear-related indicators.

The historical bottoming period appears to last whenever the indicator stays below the breakeven point.

According to LTH SOPR, past bear markets have averaged about 260 days. In the current cycle, the coin has entered the bottoming zone for 86 days so far.

This suggests that if Bitcoin ends this bear market in about the same amount of time as the average, the cryptocurrency is still only a third of the way.

BTC price

As of this writing, price of bitcoin Floating around $23,000, it was down 2% last week. The coin has gained 13% in value over the past month.

Bitcoin Price Chart

The value of the crypto seems to have been moving sideways during the last few days | Source: BTCUSD on TradingView
Featured image from mana5280 on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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