Bitcoin (BTC) has experienced a significant reduction in selling pressure following its decline below $90,000, according to new analysis. The behavior of long-term Bitcoin holders has shifted as BTC prices dip below this threshold. A variant of the renowned SOPR metric is now at its lowest point since the beginning of 2024. Recent price fluctuations have prompted some reactionary trading behaviors from short-term holders.
A recent "Quicktake" blog by the on-chain analytics platform CryptoQuant highlighted two-year lows in a crucial Bitcoin holding metric. It shows that long-term Bitcoin holders (LTHs) have largely ceased selling after BTC/USD plunged to its lowest since April. The analysis points to a significant change in the profitability of unspent transaction outputs (UTXOs) created by LTHs compared to those by short-term holders (STHs).
In this context, "LTH" and "STH" denote wallets holding a certain amount of BTC for more or less than 155 days, respectively. Utilizing a version of the Spent Output Profit Ratio (SOPR) metric, which assesses the share of UTXOs in profit versus loss, CryptoQuant has confirmed that STHs are now responsible for most profitable transactions. "The Bitcoin SOPR Ratio (LTH-SOPR / STH-SOPR) has descended to 1.35, hitting its lowest mark since early 2024. This drop aligns with Bitcoin’s price adjustment to the $89.7K range," summarized CryptoOnchain, a contributor.
From this SOPR data, CryptoOnchain inferred two main outcomes: the cessation of significant distribution by LTHs and the onset of a "market cool-down." "The decline indicates a substantial 'reset' in the market," the post elaborated. "The speculative excess that previously elevated the ratio has been purged."
Bitcoin speculators have shown unpredictable reactions to recent price movements, as reflected in their overall market behavior. The 30-day net position change of the STH group saw a notable increase on November 24, according to CryptoQuant. However, this rolling 30-day measure turned negative on December 1, coinciding with another price drop for BTC/USD around the start of December.
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