Bitcoin [BTC] long-term holders cash in: Will the market crumble under sell-offs

•  Bitcoin’s long-term holders have been cashing in on their profits, with the SOPR reaching a new milestone.
•  The profitability of short-term holders is declining, and a downtrend in Bitcoin’s price may occur.

After months of holding onto their Bitcoin [BTC], long-term investors have finally been able to cash in on their profits. It has been nearly a year since they have had this opportunity. But as these seasoned traders take their gains, some wonder if this could damper Bitcoin’s steady climb. Is the market feeling the weight of their sell-offs?

Read Bitcoin’s [BTC] Price Prediction 2023-24

Bitcoin long-term holders sustain profit taking

According to data from CryptoQuant, the Spent Output Profit Ratio (SOPR) for long-term holders of Bitcoin has reached a new milestone. As of 28 April, the metric has been above 1 for the longest stretch in nearly a year. The streak began on 18 April when Bitcoin’s price was above $30,000 and has remained above one ever since. Before this, the SOPR had been fluctuating above one. 

Source: CryptoQuant

In essence, the SOPR measures the profit ratio for Bitcoin holders by comparing the current market value to the price at which the cryptocurrency was last moved on-chain. When the SOPR is above 1, it indicates that the average profit for Bitcoin holders is positive, whereas a value below 1 suggests that Bitcoin is being sold at a loss. 

Considering the recent spike in SOPR, long-term investors may be taking advantage of the profit-taking opportunity, leading to increased selling pressure in the market. This could be one reason Bitcoin prices have struggled to maintain their upward momentum.

How profitable are long-term Bitcoin holders?

According to data from Santiment, the 180-day Market Value to Realized Value (MVRV) ratio indicated that long-term holders of Bitcoin were enjoying profits of over 20% at press time. The MVRV showed that this group of investors had been profitable since January, with the highest point of profitability reaching over 30% in March.

As of this writing, the MVRV had dropped slightly but remained above 29%.

Source: Santiment

On the other hand, the 30-day MVRV paints a different picture, indicating a decline in profitability. As of this writing, the 30-day MVRV was around 1.5%, a significant drop compared to the longer-term MVRV. This suggests that short-term holders may be making less profit than their long-term counterparts.

Source: Santiment

Given the current position of the longer-term MVRV, it’s possible that a downtrend in Bitcoin’s price could occur, which would likely cause the MVRV to decline further. This trend may cause short-term holders to experience further losses or reduced profits.

How much are 1,10,100 BTCs worth today?

Bullish momentum slows

As of this writing, BTC was experiencing a second day of consecutive decline on a daily timeframe. It was trading at around $29,200, with a decline of less than 1%.

Despite the recent drop, the overall trend was still bullish. However, the consecutive declines have caused the Relative Strength Index (RSI) line to decrease slightly. This could suggest a potential slowdown in Bitcoin’s bullish momentum, and it’s worth keeping an eye on the RSI line to see if this trend continues.

Source: TradingView