The Bitcoin long-term holding SOPR (EMA 30) trend may indicate that BTC holders will experience more pain in the coming months.
SOPR, a Bitcoin long-term holder, recently fell below “one.”
If history is any guide, BTC investors may be in for a frustrating few months, according to an analyst in a CryptoQuant post.
The “spent output profit ratio” (or SOPR for short) is a metric that indicates whether Bitcoin investors are now selling at a profit or a loss.
The metric works by examining the transaction history of each coin sold on the chain to determine the most recent price at which it was moved.
If a coin’s previous selling price was less than the current value of BTC, the coin was simply sold for a profit.
On the other side, if the currency’s previous worth is more than its current price, it indicates that the coin has moved at a loss. When the SOPR number is more than one, it indicates that the whole Bitcoin market is now profitable.
Values of the indication smaller than one, on the other hand, indicate that investors as a whole are now losing money.
The quant has highlighted all of the significant trend regions for the Bitcoin long-term holder SOPR.
During previous bottoms, the indicator’s EMA-30 value appears to have dropped below one and trended sideways there for a time (except for the COVID-19 crash, where the metric did not stay in the zone for long).
Recently, the LTH SOPR’s value fell below one, implying that long-term investors are currently losing money.
While similar capitulation occurrences have traditionally resulted in bottom formations, the analyst believes it will be weeks, if not months, before a low is identified.
The “long-term holder” (LTH) category now includes any Bitcoin investor who has held their coins for at least 155 days without moving or selling.
The figure depicts the SOPR trend for these LTHs over the course of the cryptocurrency’s history.
The quant has highlighted all of the significant trend zones for the Bitcoin long-term holder SOPR in the graph above.
Bitcoin’s price is currently hovering at R338k, up 11% in the last week. Here’s a chart that displays the coin’s value trend over the last five days: