Bitcoin has seen underperformance in recent days with on-chain metrics that provide valuable insights into market behavior.
Among these metrics, the leveraged output profit ratio (SOPR) for long-term holders has particularly emerged as a critical tool for assessing investor sentiment and market resilience.
Long-term holders, defined as investors who hold Bitcoin for more than 155 days, are often referred to as a stabilizing force In the market their selling patterns can significantly influence price trends, making SOPR an indicator worth watching.
Long-term trends of holders and market sentiment
recent Analysis A CryptoQuant analyst known as Cryptoavails emphasizes that the long-term Bitcoin holder SOPR benchmark continues to show significant patterns with the upward trend of the Bitcoin price.
Historically, SOPR values above 1 indicate that long-term holders are selling at a profit, while values below 1 indicate that they are dumping their holdings at a loss.
This behavior indicates greater market confidence or capitulation during bearish periods. Currently, the SOPR measure remains consistently above 1, indicating that long-term holders are selling profitably without significant upside. downward pressure On the price of Bitcoin
Cryptoavails analysis tracks the key phases of the Bitcoin market over the past two years and highlights significant changes in SOPR value. For example, in early 2022, the SOPR metric showed high volatility with frequent spikes, indicating strong profit-taking activity by long-term holders.
Amidst these sales, the price of Bitcoin experienced a downward trend, indicating continued selling pressure during that period. This process It was gradually moved In late 2022 and early 2023, when the SOPR measure remained mostly below 1, indicating long-term holders were selling at a loss as the market sought stability.
In mid-2023, SOPR started its uptrend and signaled Confidence again Among long-term investors, the metric consistently moved near or above the critical level of 1, indicating that long-term holders are once again selling at a profit as market confidence begins to recover.
This bullish trend remains intact until 2024, supported by the rising price level of Bitcoin. Importantly, there has been no significant selling by long-term holders, which reinforces the stability of the broader market, according to the crypto analyst.
SOPR as a forward indicator for market growth
Overall, Cryptoavails noted that the current state of Bitcoin's SOPR indicates healthy market dynamics, with long-term holders participating in a stable price structure. Despite periodic corrections, the sustained presence of SOPR above 1 indicates that selling pressure remains contained.
The analyst also noted that this behavior reflects the maturity of the market, where long-term investors are in no rush to unload their assets. Bitcoin price increase.
Regardless, Bitcoin has continued to decline in price since its sharp plunge below $100,000 last week. At the time of writing, Bitcoin is down 1.6% in the last 24 hours at $93,991.
Featured image created with DALL-E, chart from TradingView
