Data from Glassnode shows that long-term holders of Bitcoin are still selling the coin at a loss these days.
Bitcoin Long-Term Holder SOPR Continues to Be Below Value 1
According to the latest weekly report from Glassnode, bitcoin investors have realized losses for 9 months now. The relevant indicator here is the “Spent Profit Output Ratio” (SOPR), which tells whether the average holder in the Bitcoin market is selling coins at a profit or a loss today.
When the value of this metric is greater than 1, it means that investors are generally making some profit through selling now. On the other hand, a value below the threshold indicates that the market as a whole has engaged in the realization of losses.
Of course, a SOPR that is exactly equal to 1 indicates that the investors are just losing their investment, because the total amount of profit realized is equal to the loss realized in the value.
One of the two main segments in the Bitcoin market is made up of “long-term holders” (LTH), which are investors who have held the coin for more than 155 days, without moving or selling it. The partner cohort is a group of “short-term holders” (STH).
Now, here’s a chart showing the trend in Bitcoin SOPR specifically for that LTH over the past few years:
The value of the metric seems to have been climbing in recent days | Source: Glassnode's The Week Onchain - Week 6, 2023
As shown in the chart above, Bitcoin LTH SOPR has dropped below the 1 mark after the collapse of LUNA last year and remains there. This means that these investors have sold at a loss throughout the bear market.
The chart also highlights the trend that the metric followed during the 2018-2019 bear market. It looks like the LTH SOPR is also falling below the breakeven mark as well.
In general, investors who buy in a bull market and hold on until the bear market enters (thus maturing into LTH) suffer huge losses as bull runs naturally offer relatively high acquisition prices.
Some of these holders would have given up as prices fell during bearish periods and losses deepened. Because of this, the LTH SOPR sank below 1 at that time.
In the bear market of 2018-2019, Bitcoin LTH continued to sell in losses for 291 days, before the same rally now pulls it back to profits. So far in the current cycle, the indicator has spent 265 days in this zone, which is not far from the time spent in the last cycle.
From the chart, it can be seen that LTH SOPR seems to have gained some uptrend recently (although it is still below 1), which suggests that the latest rally may be slowly helping it to recover.
BTC price
At the time of writing, Bitcoin is trading around $22,900, up 1% over the past week.
BTC has declined in the last few days | Source: BTCUSD on TradingView
Featured images from cdd20 on Unsplash.com, charts from TradingView.com, Glassnode.com