On-chain data shows that Bitcoin’s long-term holder SOPR has seen spikes recently, suggesting that this cohort is still continuing to sell off.
Bitcoin long-term headline SOPR soared as price crossed $30k
As noted in a CryptoQuant post, selling pressure in the market still appears high as long-term holders also look to sell.
The “Earnings to Spent Production Ratio” is an indicator that tells us whether the overall market is selling Bitcoin at a profit or a loss at the moment.
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 (ie the selling price) with the last price.
When the value of this ratio is greater than one, it means that investors are, on average, selling at a profit right now.
On the other hand, indicator values less than one imply that the Bitcoin market as a whole is currently experiencing losses.
One cohort of BTC investors is the group of “long-term holders” (LTHs), who hold onto their coins for at least 155 days before selling them.
Related Reading | Bitcoin Bearish Signal: Whales Increase Dumping
The “LTH SOPR” tells us about the realization of gains or losses for this group specifically. Here is a chart showing the trend in this indicator (EMA 144) over the last month:
It seems like the value of the metric has observed some spikes recently | Source: CryptoQuant
As you can see from the chart above, the long-term headline Bitcoin SOPR (EMA 144) had a couple of spikes in the past few days.
One took place on the 13th of May, while the other occurred on the 18th. During these two instances, the price had broken above $30k shortly before.
Related Reading | Funding Rates Fall to Yearly Lows Following Bitcoin’s Drop Below $29,000
This means that LTHs have been feeling pressure in the current market to take their profits as soon as the price breaks above $30k.
Typically, long-term Bitcoin holders are the cohort least likely to sell. Therefore, the selling pressure of this group can be bearish for the price of cryptocurrencies.
At the time of writing, the price of Bitcoin is hovering around $29,400, up 3% in the last seven days. Over the last month, the cryptocurrency has lost 28% of its value.
The chart below shows the trend in the price of the coin for the past 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, unable to gain ground above the mark. As long as the sell-off continues at the level, the crypto will not be able to really recover.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com