On-chain data shows long-term Bitcoin holders are dumping their coins as BTC dips below the $17,000 level.
Bitcoin long-term holder SOPR spikes today
As noted by an analyst in a CryptoQuant after, some long-term holders of BTC appear to have taken profits over the past day. The relevant indicator here is the “Spent output profit ratio”, which tells us whether Bitcoin investors as a whole are currently selling their coins at a profit or loss.
When this statistic has a value greater than 1, it means that the average holder has recently moved their coins with some profit. On the other hand, values below the threshold suggest that the overall market has suffered some loss. Of course, SOPR exactly equal to 1 implies that the investors just broke even on their sales.
The “long-term holder(LTH) group is a Bitcoin cohort that includes all investors who have held their coins since at least 155 days ago, without having moved or sold them from a single address. Here is a chart showing the trend in the Bitcoin SOPR specifically for these LTHs over the past 15 days:
Looks like the EMA16 value of the metric has shot up in the last few hours | Source: CryptoQuant
As the chart above shows, the Bitcoin LTH SOPR (EMA16) has seen a sharp spike above 1 over the past day. This means that these holders reaped some profit today. Statistically, LTHs are the investors least likely to ever sell, so any dumping from them could have a noticeable impact on the BTC market.
The chart shows that when the indicator last saw such a large spike in its value, the crypto’s price plummeted shortly after. Interestingly, the latest spike only came after BTC dipped below $17k. Usually such holders sell for profit during rallies, but here the dumping has come after the bullish momentum has already passed.
This could be a sign that with all FUD currently circulating the market, these supposed diamond hands have also broken and are currently feeling bearish about Bitcoin’s outlook. Such a trend is likely to be negative for the price and could lower the cryptocurrency even further.
BTC price
The price of the coin seems to have slid down over the last few days | Source: BTCUSD on TradingView
At the time of writing, Bitcoin price is hovering around $16.7k, down 2% over the past week. The chart above shows the trend in the crypto’s value over the past five days.