Bitcoin long-term holders are displaying early signs of selling pressure, as a key on-chain metric recently fell below a critical threshold, according to market data.
Summary
- Bitcoin long-term holders are showing early signs of selling at a loss, as the Long-Term Holder SOPR metric dipped below 1.0, signaling potential capitulation.
- Large holders have reduced positions at the fastest pace since early 2023, though the 30-day average LTH SOPR remains positive, suggesting some resilience.
- Analysts note mixed signals: while short-term holders near profitability and technical patterns hint at possible trend continuation, repeated resistance may limit immediate upside.
The Long-Term Holder Spent Output Profit Ratio (LTH SOPR) recently dropped below 1.0, indicating that some holders are selling at a loss, according to analysis shared on January 13 by market analyst Darkfost. The metric measures whether coins moved on-chain are being sold at a profit or loss, with values above 1.0 indicating profit-taking and drops below 1.0 signaling capitulation.
The metric for coins held for more than six months briefly slipped under the 1.0 threshold, behavior typically associated with bear market phases. The selling pressure appears to be coming from holders who purchased Bitcoin within the last nine months and are now selling at a loss, according to the analysis.
Long-term holders, defined as those holding Bitcoin for more than six months, have historically provided price stability during corrections. The 30-day average LTH SOPR remains positive at 1.18, though it sits below the annual average near 2.0, reflecting a decline in realized profits.
The development coincides with a reduction in holdings by large investors. Addresses holding between 1,000 and 10,000 coins have reduced positions over the past year at the fastest rate since early 2023, according to blockchain data.
Other market analysts have pointed to potentially constructive technical patterns. Chartist Egrag Crypto identified a hidden bullish divergence on Bitcoin’s weekly chart, where price forms higher lows while the RSI momentum indicator makes lower lows, a pattern that can precede trend continuation.
The Sell-Side Risk Ratio, which measures the scale of profits and losses being realized, has returned to levels last seen in October 2023, suggesting distribution is occurring with less conviction, according to market data.
Bitcoin has traded in a relatively tight range over the past week. In the last 24 hours, the price moved modestly higher, with short-term holders nearing profitability, according to investor CW.
Analysts have stated that reclaiming a higher price zone could trigger renewed buying, though repeated resistance attempts in recent weeks may impact momentum.
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