A crypto analyst, PelinayPA, noticed something interesting about Bitcoin: long-term holders (LTHs) are becoming more profitable than short-term holders (STHs). This could be a big deal, suggesting a new bull market might be on the horizon.
The SOPR Ratio: A Key Indicator
PelinayPA used the Spent Output Profit Ratio (SOPR) to reach this conclusion. SOPR shows whether Bitcoin investors are selling at a profit or a loss. By comparing the SOPR of LTHs and STHs, we get a clearer picture of market sentiment.
- High LTH/STH SOPR Ratio: Long-term holders are making more money. This often signals a healthy bull market.
- Low LTH/STH SOPR Ratio:
Short-term traders are winning. This usually happens at market peaks or during bear markets.
Historically, this ratio has been a pretty good predictor of Bitcoin’s price movements. During the 2020-2021 bull run, both LTHs and STHs were profitable, leading to an unsustainable rally and eventual crash. The 2022-2024 bear market saw a low SOPR ratio, reflecting poor profitability for everyone. But as Bitcoin’s price recovered, the ratio started climbing again.
Now, the LTH/STH SOPR ratio is rising, suggesting LTHs are gaining an edge. PelinayPA thinks this is an early sign of a new bull market, with a potential price target of $120,000.
Whale Watching: Big Players Are Buying
Meanwhile, large institutional investors and “whales” (individuals holding massive amounts of Bitcoin) are steadily accumulating more Bitcoin, regardless of the price. Analyst Darkfost points to Coinbase Premium, which has been positive since April, indicating strong US institutional buying compared to other exchanges like Binance.
Currently, Bitcoin is trading around $115,668, slightly down over the past week. But with LTHs gaining profitability and whales accumulating, the future might be brighter than it seems.