On-chain data shows the Bitcoin long-term holder SOPR has recently observed spikes, suggesting that this cohort is still continuing to sell.
As pointed out by a CryptoQuant post, selling pressure in the market still looks to be high as long-term holders are also looking to sell.
The “spent output profit ratio” is an indicator that tells us whether the overall market is selling Bitcoin at a profit or loss right now.
The metric works by checking the on-chain history of each coin being sold to see what price it last moved at. It then divides the current price (that is, the selling price) with the last price.
When the value of this ratio is greater than one, it means investors are, on an average, selling at a profit at the moment.
On the other hand, values of the indicator less than one imply that the Bitcoin market as a whole is realizing loss currently.
A cohort of BTC investors is the “long-term holder” (LTH) group, who hold their coins for at least 155 days before selling.
Related Reading | Bitcoin Bearish Signal: Whales Ramp Up Dumping
The “LTH SOPR” tells us about profit or loss realization from specifically this group. Here is a chart that shows the trend in this indicator (EMA 144) over the past month:
It seems like the value of the metric has observed some spikes recently | Source: CryptoQuant
As you can see in the above graph, the Bitcoin long-term holder SOPR (EMA 144) had a couple of spikes in the last few days.
One took place on 13th May, while the other occurred on the 18th. During both these instances, the price had crossed $30k shortly before.
Related Reading | Funding Rates Fall To Yearly Lows Following Bitcoin’s Fall Below $29,000
This means that LTHs have been feeling pressure in the current market to realize their profits as soon as the price reaches above $30k.
Usually, Bitcoin long-term holders are the least likely cohort to sell. So, selling pressure from this group can prove to be bearish for the crypto’s price.
At the time of writing, Bitcoin’s price floats around $29.4k, up 3% in the last seven days. Over the past month, the crypto has lost 28% in value.
The below chart shows the trend in the price of the coin over the last five days.
Looks like the price of the crypto has seen some decline over the past two days | Source: BTCUSD on TradingView
Over the past week, Bitcoin has mostly consolidated around the $30k mark, failing to gain any ground above the mark. As long as selling at the level continues, the crypto won’t be able to make any real recovery.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com