Data on the network shows that the SOPR of a long-term holder of bitcoin has fallen to March 2020 levels as the price of the cryptocurrency fell below $24k.
Long-term bitcoin holder SOPR plunges below one
As a CryptoQuant analyst points out maillong-term holders of BTC are now aware of the same level of loss as they were in March 2020.
The “Worked Exit Profit Ratio” (or SOPR for short) is a metric that tells us whether bitcoin investors are selling at a profit or at a loss right now.
The metric works by looking at the history of each sold coin on the network to see at what price it was previously sold.
If that last price was less than the current value of the cryptocurrency, then that particular coin has now been traded for a profit.
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On the other hand, a previous sale value greater than the last price would indicate that the coin has suffered a loss.
When the SOPR value is greater than one, it means that the entire BTC market is selling at a profit at the moment. Values less than one, on the contrary, imply that investors in general are now aware of the losses.
“Long Term Holders” (LTH) are those Bitcoin investors who hold their coins for at least 155 days without selling them.
Here is a chart showing SOPR BTC dynamics for exactly these LTHs:
The value of the 20-day MA LTH SOPR looks to have plunged down recently | Source: CryptoQuant
As you can see in the chart above, the SOPR of a long-term bitcoin holder has recently fallen below one, indicating that LTH has been trading at a loss recently.
The degree of awareness of the loss of LTH is now the same as it was in March 2020 after the collapse due to COVID-19. Around the same time, the cryptocurrency bottomed out.
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Long-term holders, who are in the same pain now as they were then, can assume that this time too, the market may soon see a bottom.
At the time of writing, the price of Bitcoin is hovering around $23.5k, down 24% from the last seven days. Over the past month, the cryptocurrency has lost 19% in price.
The chart below shows the price dynamics of the coin over the past five days.
Looks like the value of the crypto has crashed down over the last couple of days | Source: BTCUSD on TradingView
Today, Bitcoin fell below the $24K mark for the first time since December 2020, more than 18 months ago. It is currently unclear if the crash has passed or if the coin will continue to decline.
Featured image from Unsplash.com, charts from TradingView.com, CryptoQaunt.com
Credit : www.newsbtc.com