bitcoin has continued to experience declining performance in recent days and on-chain metrics offer valuable insights into market behavior.
Among these metrics, the Spent Production Profit Ratio (SOPR) for long-term holders in particular has become a critical tool in assessing investor sentiment and market resilience.
Long-term holders, defined as investors who hold bitcoin for more than 155 days, are often seen as a stabilizing force in the market. Its selling patterns can significantly influence price trends, making SOPR an indicator worth watching.
Long-term holder trends and market sentiment
Recent <a target="_blank" href="https://cryptoquant.com/insights/quicktake/676883cb12a32e1b224da964-bitcoin-Long-Term-Holder-SOPR-Chart” target=”_blank”>analysis from a CryptoQuant analyst known as Cryptoavails highlights that the SOPR metric of bitcoin's long-term holder continues to exhibit notable patterns as the price of bitcoin trends higher.
Historically, SOPR values greater than 1 indicate that long-term holders are selling at a profit, while values less than 1 suggest they are selling their holdings at a loss.
This behavior reflects increased market confidence or capitulation during periods of falling prices. Currently, the SOPR metric remains consistently above 1, indicating that long-term holders are selling profitably without adding significant downward pressure on the price of bitcoin.
Cryptoavails analysis tracks key phases in the bitcoin market over the past two years, highlighting significant changes in SOPR values. For example, in early 2022, the SOPR metric showed high volatility with frequent spikes, suggesting intense profit-taking activity by long-term holders.
Amid these selling, the price of bitcoin experienced a downward trend, reflecting persistent selling pressure during that period. This trend gradually changed in late 2022 and early 2023, when the SOPR metric remained mostly below 1, indicating that long-term holders were selling at a loss as the market searched for stability.
In mid-2023, SOPR began to trend upward, indicating renewed confidence among long-term investors. The metric steadily approached or surpassed the critical level of 1, suggesting that long-term holders were once again selling at a profit as market sentiment began to recover.
This upward trend has remained intact until 2024, supported by rising bitcoin price levels. Importantly, there have been no significant sell-offs by long-term holders, reinforcing the stability of the overall market, according to the crypto analyst.
SOPR as a forward-looking indicator of market growth
Overall, Cryptoavails mentioned that the current status of bitcoin's SOPR suggests healthy market dynamics, with long-term holders contributing to a stable price structure. Despite periodic corrections, the sustained presence of SOPR above 1 indicates that selling pressure remains under control.
The analyst also noted that this behavior reflects the maturity of the market, where long-term investors are not rushing to dump their holdings despite bitcoin's price appreciation.
Regardless, the price of bitcoin has continued to decline steadily since its sharp drop below $100,000 last week. At the time of writing, bitcoin is trading at a price of $93,991, down 1.6% in the last 24 hours.
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