Bitcoin Long-Term Holders Show Early Capitulation Signals

Source: CryptoNewsNet Original Title: Bitcoin long-term holders show early capitulation signals Original Link: https://cryptonews.net/news/bitcoin/32272490/

Market Analysis: Bitcoin Long-Term Holder Selling Pressure

Bitcoin long-term holders are displaying early signs of selling pressure, as a key on-chain metric recently fell below a critical threshold, according to market data.

Key Findings

The Long-Term Holder Spent Output Profit Ratio (LTH SOPR) recently dropped below 1.0, indicating that some holders are selling at a loss. The metric measures whether coins moved on-chain are being sold at a profit or loss, with values above 1.0 indicating profit-taking and drops below 1.0 signaling capitulation.

The metric for coins held for more than six months briefly slipped under the 1.0 threshold, behavior typically associated with bear market phases. The selling pressure appears to be coming from holders who purchased Bitcoin within the last nine months and are now selling at a loss.

Resilience Indicators

Long-term holders, defined as those holding Bitcoin for more than six months, have historically provided price stability during corrections. The 30-day average LTH SOPR remains positive at 1.18, though it sits below the annual average near 2.0, reflecting a decline in realized profits.

The development coincides with a reduction in holdings by large investors. Addresses holding between 1,000 and 10,000 coins have reduced positions over the past year at the fastest rate since early 2023, according to blockchain data.

Technical Signals

Other market analysts have pointed to potentially constructive technical patterns. A hidden bullish divergence has been identified on Bitcoin’s weekly chart, where price forms higher lows while the RSI momentum indicator makes lower lows, a pattern that can precede trend continuation.

The Sell-Side Risk Ratio, which measures the scale of profits and losses being realized, has returned to levels last seen in October 2023, suggesting distribution is occurring with less conviction.

Current Market Position

Bitcoin has traded in a relatively tight range over the past week. Short-term holders are nearing profitability, indicating mixed market sentiment. Analysts have stated that reclaiming a higher price zone could trigger renewed buying, though repeated resistance attempts in recent weeks may impact momentum.