Why Pain May Not Be Over For Bitcoin Holders Just Yet
June 26 2022 - 3:00PM
NEWSBTC
Past trend of the Bitcoin long-term holder SOPR (EMA 30) may
suggest that BTC holders may face more pain in the coming months.
Bitcoin Long-Term Holder SOPR Has Dropped Below “One” Recently As
explained by an analyst in a CryptoQuant post, BTC investors may be
in for a frustrating few months if history is anything to go by.
The “spent output profit ratio” (or SOPR in short) is an indicator
that tells us whether Bitcoin investors are selling at a profit or
at a loss right now. The metric works by going through the
transaction history of each coin being sold on the chain, to see
what price it was last moved at. If the previous selling price of
any coin was less than the current value of BTC, then the coin has
just been sold for a profit. On the other hand, the past value
being more than the latest price of the crypto would imply the coin
has moved at a loss. When the value of the SOPR is greater than
one, it means the overall Bitcoin market is selling at a profit
right now. Related Reading | Bitcoin Coinbase Premium Gap
Approaches Zero, Selloff Ending? On the other hand, values of the
indicator less than one imply investors as a whole are realizing
some loss at the moment. Now, the “long-term holder” (LTH) group
includes any Bitcoin investor who has been holding their coins
since at least 155 days ago without moving or selling. The below
chart shows the trend in the SOPR over the history of the crypto
specifically for these LTHs. Looks like the 30-day exponential-MA
value of the indicator has gone down recently | Source: CryptoQuant
In the above graph, the quant has highlighted all the regions of
relevant trend for the Bitcoin long-term holder SOPR. It seems like
during past bottoms, the indicator’s EMA-30 value has gone below
one and trended sideways there for a while (except for the COVID-19
crash, where the metric didn’t stay in the zone for too long).
Related Reading | Bitcoin Whale Presence On Derivatives Still
High, More Volatility Ahead? Recently, the LTH SOPR’s value has
once again gone below one, suggesting long-term holders are
realizing losses right now. The analyst notes that while such
capitulation events have historically lead to bottom formations, it
may still be a while, even months, before a low is actually found.
BTC Price At the time of writing, Bitcoin’s price floats around
$21.4k, up 11% in the past week. Here is a chart that shows the
trend in the value of the coin over the last five days: 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
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