2023-04-29 01:10:56
© Reuters Bitcoin: Long Term Holders Profit for 1st Time in 11 Months
CriptoFácil – Blockchain data shows that long-term (BTC) investors are back in profit. It is the first time that this movement happens since June last year. This is positive, as renewed profitability for holders often precedes large price rallies.
Indeed, the price of BTC experienced a small rally on Thursday (27th), just after the confirmation of this indicator. Known as LTH-SOPR, the indicator is part of the list evaluated by the analysis company Glassnode.
Bitcoin Holders Profit Indicator
The SOPR is the proportion of unspent transaction output, or UTXO. UTXO is a transaction output that has not been used as input in a new transaction. In a way, UTXO works like the “change” in BTC transactions. This relationship between the proportions, called the SOPR, is calculated in dollars. When it is positive, it means that long-term holders are operating in profit.
SOPR focuses on coins moved on the blockchain that have a shelf life of at least 155 days. According to the chart below, the red bars indicate investors’ loss, while the green ones indicate that they are in profit.
In other words, whenever this indicator is below 1, holders are at a loss. But if the indicator goes above 1, it means they are in profit. The current SOPR value is around 1.8.
“SOPR tends to better reflect macro changes in the market. After a prolonged period of realized losses (LTH-SOPR
Bitcoin Rally Post-Rising
The latest SOPR recovery move comes amidst Bitcoin’s recovery from a bear market. Priced at $29,500 and the cryptocurrency is up 90% from the low of $15,460 recorded last November.
The index’s previous crossovers above 1 took place in three specific periods: May 2020, May 2019 and November 2015. In all three cases, the BTC price opened a strong recovery rally that eventually translated into new highs.
The chart shows that readings far below 1 have historically marked periods of investor capitulation, which coincided with market bottoms. Meanwhile, values above 10 signal market tops, indicating a possible future correction.
BLOW above one to create resistance
While the index crossover above 1 could imply a positive market cycle ahead, in the short term, this could slow the cryptocurrency’s rise.
“The long-term investor pool at the moment consists of many 2021-22 cycle holders, many of which remain underwater and are likely to build resistance during the market recovery,” noted Glassnode.
South Korea-based analyst firm CryptoQuant expressed a similar view, saying a return to profitability could inject selling pressure into the market. If investors start to take profits, it could delay or even prevent new highs in the near term.
#longterm #holders #stay #profit #1st #time #months #CriptoFácil