Bitcoin Long-Term Holders Realise More Loss Than Profit

Long-term Bitcoin holders are currently realising more losses than profits. This is evident from the so-called Long Term Holder SOPR, an on-chain metric that shows whether long-term investors are selling their coins at a profit or a loss. The data suggests that we may be in an advanced phase of a bear market.

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What does the LTH SOPR tell us?

The Spent Output Profit Ratio, or SOPR for short, is a metric that calculates the ratio at which a spent output yields a profit or loss at the time it is moved. A value above 1 means that holders are selling at a profit on average, a value below 1 indicates a loss. In this case, only outputs from long-term holders are counted, i.e. wallets that have held their coins for an extended period.

Analyst Darkfost reports that the LTH SOPR hit the low point of this cycle in early July: a reading of 0.73. That means that long-term holders were realising an average loss of 27% on their sales at that time. Since then, the ratio has recovered somewhat to 0.94, but that value remains below 1. The monthly average SOPR has stood at 0.88 since 1 June, meaning that the average has been negative for weeks.

A sign that the bear market is already well advanced

Darkfost points out that loss realisation by long-term holders is a pattern seen in every previous bear market. Historically, this phase only occurs after the bear market has already progressed significantly. That is an interesting observation in itself, as it suggests that the heaviest selling pressure may already be partly behind us.

The chart from CryptoQuant clearly shows how similar dips in the LTH SOPR occurred around the bottoms of previous cycles, such as around 2015, 2019 and 2022. Whether the current situation also marks a bottom is, of course, impossible to say with certainty. What is clear is that long-term holders are still selling at an average loss for now, and that the market has not yet fully recovered from the pressure it has been under in recent months.