On-chain assessment of the leading coin’s performance revealed that the year-to-date (YTD) rally in Bitcoin’s [BTC] price has caused its long-term spent Output Profit Ratio (LTH SOPR) metric to grow.
According to Glassnode Academy , the SOPR metric is used to understand the overall market sentiment and analyze profitability and losses incurred during a specific period for a particular crypto asset.
In addition, the indicator tracks the amount of profit realized for all on-chain coin transactions.
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As far as BTC is concerned, the LTH SOPR offers insights into the psychology of long-term holders during a bear market. When the metric is below one, it suggests that long-term holders are realizing losses and could be motivated to sell.
Conversely, when the metric is above one, long-term holders are realizing profits and may be encouraged to hold or accumulate more BTC.
CryptoQuant pseudonymous analyst Greatest Trader noted that the bearishness that plagued the 2022 trading year resulted in significant losses for market participants, including long-term investors per the LTH SOPR.
According to Greatest Trader, the LTH SOPR had been trending below one since late May 2022, indicating that long-term holders constantly lost money.
However, with the general uptrend in the crypto market since the year began, “the metric started recovering and slightly increased due to the uptrend in Bitcoin’s price,” Greatest Trader found.
While this might be taken as conclusive proof that a bull market was underway, Greatest Trader opined that:
“Yet, it is still too early to name the $15.5K level the bear market’s bottom, as the recent impulsive rally could just be a bull trap.”
The analyst warned
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