Bitcoin (BTC) has experienced a "complete reset" of sell pressure following its decline below $90,000, according to recent research. Long-term holders have adjusted their selling habits as the BTC price action returns to levels below $90,000. A derivative of the popular SOPR metric is currently at its lowest point since the beginning of 2024, indicating a significant shift in market dynamics.
Bitcoin SOPR "Ratio" Hits Key 1.35 Level
On Saturday, onchain analytics platform CryptoQuant highlighted in one of its "Quicktake" blog posts that a key Bitcoin hodl metric has reached two-year lows. Bitcoin long-term holders (LTHs) have largely ceased selling their BTC after the BTC/USD pair fell to its lowest levels since April.
CryptoQuant's analysis reveals a substantial change in the profitability of unspent transaction outputs (UTXOs) created by LTHs compared to their more speculative counterparts, short-term holders (STHs). The terms LTH and STH denote wallets that have held a specific amount of BTC for more than or less than 155 days, respectively.
Utilizing an iteration of the Spent Output Profit Ratio (SOPR) metric, which assesses the proportion of UTXOs in profit versus loss, CryptoQuant confirms that STHs are now responsible for the majority of transactions conducted in profit. Contributor CryptoOnchain summarized that "The Bitcoin SOPR Ratio (LTH-SOPR / STH-SOPR) has dropped to 1.35, marking its lowest level since the beginning of 2024. This decline coincides with Bitcoin’s price correction to the $89.7K level."
CryptoOnchain derived two significant conclusions from the SOPR data: the "end of heavy distribution" by LTHs and the emergence of a "market cool-down." The analysis further stated, "The drop suggests a massive ‘reset’ in the market."
“The speculative froth that drove the ratio to highs earlier in the cycle has been flushed out.”
Speculators Confused by BTC Price Moves
Bitcoin speculators have exhibited erratic behavior in response to recent BTC price action, as evidenced by their overall exposure levels. The net position change of the STH cohort on a rolling 30-day basis showed a significant upward spike on November 24. Subsequently, the 30-day rolling tally turned negative on December 1, coinciding with another drawdown in BTC/USD around the December monthly open.
