Bitcoin Long-Term Holder Capitulation Approaching Bottom Zone, But Not Quite There Yet
July 04 2022 - 3:00PM
NEWSBTC
On-chain data shows Bitcoin long-term holder capitulation has
deepened recently, but has not entered into the historical bottom
zone yet. Bitcoin Long-Term Holder SOPR Continues To Observe Deep
Values Below ‘1’ As explained by an analyst in a CryptoQuant post,
BTC long-term holders have been realizing losses in recent weeks.
The “spent output profit ratio” (or SOPR in short) is an indicator
that tells us whether Bitcoin investors are currently selling at a
profit or at a loss. The metric works by checking the on-chain
history of each coin being sold to see what price it was last moved
at. If this last selling value of any coin was less than the
current BTC price, then that coin has now been sold at a profit.
Related Reading | Can This Bitcoin Ratio Have Hints For A
Bottom? On the other hand, the previous price being more than the
one right now would imply the coin has realized some loss. When the
SOPR is greater than one, it means the overall Bitcoin market is
harvesting some profits at the moment. On the contrary, a value
less than that implies loss realization is going on among BTC
investors right now. “Long-term holder” group includes all BTC
investors that held their coins for at least 155 days before
selling or moving them. The below chart shows the trend in the
14-day MA SOPR specifically for these LTHs: The value of the metric
seems to have been going down recently | Source: CryptoQuant As you
can see in the above graph, the quant has marked all the relevant
points of trend for the 14-day MA Bitcoin long-term holder SOPR. It
seems like the major bottoms in the history of the crypto were
formed whenever the indicator’s value sank to a value of around
0.48 (denoted by the green line in the chart). Related Reading
| $15k Possible Bottom For Bitcoin? “Delta Cap” Says So This
kind of value occurs when LTHs go into deep capitulation. Since
this is the BTC cohort least likely to sell at any point, large
loss realization from them can signal that the bear bottom is
coming near. Currently, the indicator is also below 1, but it still
has a value of about 0.62, a bit higher than the historical bottom
zone. This would suggest that while Bitcoin may be heading towards
a bottom, it’s not quite there yet. BTC Price At the time of
writing, Bitcoin’s price floats around $19.4k, down 9% in the past
week. The below chart shows the trend in the value of the crypto
over the last five days. Looks like the price of the coin has been
moving sideways over the last few days | Source: BTCUSD on
TradingView Featured image from Brent Jones on Unsplash.com, charts
from TradingView.com, CryptoQuant.com
Real-Time news about (Cryptocurrency): 0 recent articles
More Chain News Articles