- Bitcoin’s long-term holders have been cashing in on their profits, with the SOPR reaching a new milestone.
- The profitability of short-term holders is declining, and a downtrend in Bitcoin’s price may occur.
After months of holding onto their Bitcoin [BTC], long-term investors have finally been able to cash in on their profits. It has been nearly a year since they have had this opportunity. But as these seasoned traders take their gains, some wonder if this could damper Bitcoin’s steady climb. Is the market feeling the weight of their sell-offs?
Read Bitcoin’s [BTC] Price Prediction 2023-24
Bitcoin long-term holders sustain profit taking
According to data from CryptoQuant, the Spent Output Profit Ratio (SOPR) for long-term holders of Bitcoin has reached a new milestone. As of 28 April, the metric has been above 1 for the longest stretch in nearly a year. The streak began on 18 April when Bitcoin’s price was above $30,000 and has remained above one ever since. Before this, the SOPR had been fluctuating above one.
In essence, the SOPR measures the profit ratio for Bitcoin holders by comparing the current market value to the price at which the cryptocurrency was last moved on-chain. When the SOPR is above 1, it indicates that the average profit for Bitcoin holders is positive, whereas a value below 1 suggests that Bitcoin is being sold at a loss.
Considering the recent spike in SOPR, long-term investors may be taking advantage of the profit-taking opportunity, leading to increased selling pressure in the market. This could be one reason Bitcoin prices have struggled to maintain their upward momentum.
How profitable are long-term Bitcoin holders?
According to data from Santiment, the 180-day Market Value to Realized Value (MVRV) ratio indicated that long-term holders of Bitcoin were enjoying profits of over 20% at press time. The MVRV showed that this group of investors had been profitable since January, with the highest point of profitability reaching over 30% in March.
As of this writing, the MVRV had dropped slightly but remained above 29%.
On the other hand, the 30-day MVRV paints a different picture, indicating a decline in profitability. As of this writing, the 30-day MVRV was around 1.5%, a significant drop compared to the longer-term MVRV. This suggests that short-term holders may be making less profit than their long-term counterparts.
Given the current position of the longer-term MVRV, it’s possible that a downtrend in Bitcoin’s price could occur, which would likely cause the MVRV to decline further. This trend may cause short-term holders to experience further losses or reduced profits.
How much are 1,10,100 BTCs worth today?
Bullish momentum slows
As of this writing, BTC was experiencing a second day of consecutive decline on a daily timeframe. It was trading at around $29,200, with a decline of less than 1%.
Despite the recent drop, the overall trend was still bullish. However, the consecutive declines have caused the Relative Strength Index (RSI) line to decrease slightly. This could suggest a potential slowdown in Bitcoin’s bullish momentum, and it’s worth keeping an eye on the RSI line to see if this trend continues.
The cryptocurrency Bitcoin [BTC] has recently seen a sharp increase in value, pushing prices up to the highest they have been since 2019. However, this sudden spike in price has caused a significant number of long-term holders to cash in their profits, leading to speculation that this sell-off may cause the market to crumble and prices to drop.
The surge in price has caused investors to lock in their profits, as this is an opportune time for them to do so. Although many are hesitant to sell, many holders have been holding onto Bitcoin for years, and have reaped the benefits of the recent surge. As these sells-offs increase, it is highly likely that the market will start to correct itself, thus causing prices to go back down.
However, while such corrections are a part of the nature of the cryptocurrency market, it doesn’t mean that prices won’t go back up at some point in the near future. It is important to remember that Bitcoin is quite a volatile asset, and that there are still plenty of opportunities for it to increase in value in the long-term.
In addition to this, the strength of the Bitcoin network persists and it is still the most valuable cryptocurrency on the market. It is true that Bitcoin’s short-term value may suffer due to the sell-offs, but it is unlikely that the market will suffer long-term; Bitcoin is still a strong asset and many investors are still showing confidence in its future.
Overall, the Bitcoin market is due for a correction, as increased sell-offs are to be expected. While this may cause minor disruptions in the short-term, long-term holders of Bitcoin should take comfort; the market has endured much of its volatility in the past and is expected to continue to do so in the future.