Bitcoin’s recent price surge has sent several key indicators into positive territory. One particularly interesting metric is the Spent Output Profit Ratio (SOPR) for long-term holders (LTHs).
Long-Term Holders are Profiting
Bitcoin’s price hitting new all-time highs means long-term holders are finally seeing some serious profits. The SOPR, which measures whether spent coins resulted in profit or loss, has spiked recently. This shows that these long-term investors are starting to sell, taking their profits.
A market expert, Gaah, points out that this increase in the LTH SOPR is a sign that these investors are becoming more confident. It suggests that they believe the bull market still has some legs.
Still Room to Run?
While the SOPR for LTHs has increased significantly, it’s still below the historically crucial levels that have marked the peak of previous bull cycles. Currently, it’s slightly above 2.5, while the historically significant “red zone” sits above 4.0. This suggests there’s still potential for further price increases before a bear market begins.
Even though long-term holders are selling for profit, the selling pressure isn’t excessive yet. This means we haven’t hit the peak of the euphoria and mass selling that typically precedes a market downturn.
Market Remains Hot, But Watch Out
The market is still hot, according to Gaah, but it’s important to keep an eye on the SOPR. A continued rise in this metric could signal the market is maturing and getting closer to a peak. While the current situation is positive, investors should be prepared for potential corrections along the way. The market isn’t out of the woods yet, and significant price drops are always a possibility.