Bitcoin long-term owners still selling at a loss: Glassnode
Data from Glassnode shows that Bitcoin long-term owners have continued to sell their coins at a loss in recent days.
Bitcoin long-term holder SOPR continues to be at values below 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 Output Profit Ratio” (SOPR), which tells us whether the average holder in the Bitcoin market is selling their coins at a profit or a loss right now.
When the value of this metric is greater than 1, it means that the investors as a whole are reaping some profit through selling at the moment. On the other hand, values below the threshold mean that the overall market has participated in loss realization.
Naturally, the SOPR, which is exactly equal to 1, suggests that the investors have only broken even on their investment, as the total amount of profit is equal to the loss realized at this value.
One of the two main segments of the Bitcoin market consists of “long-term holders” (LTHs), which are investors who have held onto their coins since more than 155 days ago, without moving or selling them. The counterparty cohort is the “short-term holder” group (STH).
Now, here is a chart showing the trend in Bitcoin SOPR specifically for these LTHs over the last 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 graph above, Bitcoin LTH SOPR had dropped below the 1 mark after the LUNA collapse last year and has remained there ever since. This means that these investors have sold at a loss throughout the bear market.
The chart has also highlighted the trend that the metric followed during the 2018-2019 bear market. It seems that LTH SOPR also fell below the break-even mark then.
Generally speaking, investors who buy during bull markets and continue to hold until a bear market sets in (and thus possibly matures into LTHs) will lose heavily as bull runs naturally offer relatively high acquisition prices.
Some of these holders inevitably capitulate as prices move lower during bearish periods and their losses deepen. It is for this reason that the LTH SOPR drops below 1 in such times.
In the 2018-2019 bear market, Bitcoin LTHs continued to sell at a loss for 291 days, before a similar rally now pulled them back into profit. So far in the current cycle, the indicator has spent 265 days in this zone, which is not that far from the time spent there in the last cycle.
From the chart it is visible that the LTH SOPR seems to have picked up recently (although it is still obviously below 1 right now), suggesting that the recent rally may slowly help them recover.
BTC price
At the time of writing, Bitcoin is trading around $22,900, up 1% in the past week.
BTC has declined in the last few days | Source: BTCUSD on TradingView
Featured image from 愚木混株 cdd20 on Unsplash.com, Charts from TradingView.com, Glassnode.com
