Profit ratio

Long-Term Bitcoin Holders See March 2020-Like Losses as BTC Crashes

On-chain data shows Bitcoin’s long-term holder’s SOPR dropped to March 2020 levels as the crypto’s price falls below $24,000.

Bitcoin Long-Term Holder SOPR Dips Deeper Below One

As one analyst pointed out in a CryptoQuant Publishlong-term BTC holders are now realizing a similar level of loss to March 2020.

The “Spent Production Profit Ratio” (or SOPR for short) is an indicator that tells us if Bitcoin investors are selling for profit or at a loss right now.

The metric works by looking at the on-chain history of each coin sold to see what price it was previously moved at.

If that last price was below the current value of the crypto, then that particular coin has now been sold at a profit.

Related Reading | Bitcoin Slides as CPI Report Hints at Soaring Inflation – More Downside Pressure Ahead?

On the other hand, the previous sell value being higher than the last price would imply that the coin has made a loss.

When the value of SOPR is greater than one, it means that the overall BTC market is selling for profit at the moment. Values ​​less than one, on the contrary, imply that investors as a whole are making losses at this time.

“Long Term Holders” (LTH) are Bitcoin investors who hold their coins for at least 155 days without selling them.

Here is a chart that shows the BTC SOPR trend specifically for 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, Bitcoin’s long-term holder’s SOPR fell below one in value just a while ago, showing that LTH has been selling at a loss recently.

The degree of realization of LTH losses is currently the same as in March 2020, following the crash due to COVID-19. The crypto also bottomed out around this time.

Related Reading | Face to face: Bitcoin, profitability of Ethereum for investors

Long-term holders who are now suffering the same pain as then may suggest that the market may soon see a bottom this time as well.

BTC price

As of this writing, the price of Bitcoin is hovering around $23.5,000, down 24% in the past seven days. Over the past month, the crypto has lost 19% in value.

The chart below shows the price trend of the coin over the past five days.

Bitcoin Price Chart

Looks like the value of the crypto has crashed down over the last couple of days | Source: BTCUSD on TradingView

Today, Bitcoin fell below $24,000 for the first time since December 2020, over 18 months ago. Currently, it is unknown if the crash has passed or if the coin will drop further.

Featured image from Unsplash.com, charts from TradingView.com, CryptoQaunt.com