Bitcoin has tumbled below $21k in the past day as on-chain data shows signs of long-term holders reaping profits.
Bitcoin Long-Term Holder SOPR Has Increased in Recent Days
As told by an analyst at Cryptoquant PostThe local has been the top in the price of crypto before taking profits from long-term holders.
The relevant indicator here is the “spent output profit ratio”, which tells us whether the average bitcoin investor is currently selling at a profit or loss.
When the value of this metric is greater than 1, it means that holders as a whole are still receiving some amount of profit.
On the other hand, a SOPR value below the threshold indicates that the overall market is currently selling at a loss.
Naturally, the value of the indicator is exactly one which means that BTC investors are cracking down on their sell as well.
Now, there is a bitcoin group called “Long Term Holders” (LTH), which includes all investors who have held their coins for at least 155 days without having to transfer or sell them.
Here is a chart that shows the trends in SOPR specifically for this BTC holder group over the past few weeks:
Looks like the EMA 16 value of the metric has been quite high recently | Source: CryptoQuant
As you can see in the above graph, the LTH SOPR has risen sharply above 1 over the past few days, indicating that these holders are taking some profit.
The chart also highlights past examples of the indicator’s high values during the past two weeks. It seems that the crypto price has seen a local top at the same time or soon after, whenever the indicator has risen to very high levels in this period.
As the LTH SOPR values have risen again recently, a local top formation for BTC could occur if the same trend continues as before.
And the decline may have already begun, as Bitcoin today plunged below the $21k level after sustaining it over the weekend.
At the time of writing, bitcoin is priced around $20.7k, up 1% over the past week. In the past month, the value of crypto has risen by 3%.
The chart below shows the coin’s price trend over the past five days.
The value of the crypto seems to have come down a bit over the last 24 hours | Source: BTCUSD on TradingView
Featured image from Andy Holmes on Unsplash.com, charts from TradingView.com, CryptoQuant.com