Bitcoin has continued to see declining performance in recent days with on-chain metrics offering valuable insights into market behavior.
Among these metrics, the Spending Return Profit Ratio (SOPR) for long-term holders has particularly emerged as an essential tool for assessing investor sentiment and market resilience.
Long-term holders, defined as investors holding Bitcoin for more than 155 days, are often seen as a constant force in the market. Their sales patterns can have a significant impact on price movements, making SOPR an indicator worth watching.
Long-term owner movements and market sentiment
Recently analysis from a CryptoQuant analyst called Cryptoavails reveals that the long-term holder of the Bitcoin metric SOPR continues to show certain patterns as Bitcoin prices rise.
Historically, SOPR values above 1 indicate that long-term holders are selling at a profit, while values below 1 suggest they are unloading their holdings at a loss.
This behavior reflects broader confidence in the market or capitalization during periods of price decline. Currently, the SOPR metric remains consistently above 1, indicating that long-term holders are selling profitably without adding much. weight down on the price of Bitcoin.
Cryptoavails analysis follows key levels in the Bitcoin market over the past two years, showing significant changes in SOPR values. For example, in early 2022, the SOPR metric showed high volatility with frequent spikes, suggesting profit-intensive activity by long-term holders.
Amidst these sales, the price of Bitcoin was declining, indicating continued selling pressure during that period. This move gradually 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 sought stability a find
By mid-2023, the SOPR began to increase, he pointed out renewed confidence among long-term investors. The metric moved consistently closer to or above the critical level of 1, suggesting that long-term holders were once again selling at a profit as market confidence began to recover back
This upward trend has remained intact until 2024, supported by Bitcoin's rising price levels. Importantly, there was no major selling by long-term holders, confirming the stability of the market in general, according to the crypto analysis.
SOPR as a forward signal for market growth
Overall, Cryptoavails mentioned that the current state of Bitcoin's SOPR suggests a healthy market dynamic, with long-term holders contributing to a stable price structure. Despite periodic corrections, the constant presence of SOPR above 1 indicates that selling pressure remains in control.
The analyst also pointed out that this behavior reflects the maturity of the market, where long-term investors are in no rush to unload their holdings despite Bitcoin value price.
Despite this, Bitcoin has continued to steadily decrease in price since it suddenly fell below $100,000 last week. At the time of writing, Bitcoin is trading at a price of $93,991 down by 1.6% in the last 24 hours.
Featured image created by DALL-E, Chart from TradingView
