This chart illustrates the variations in the SOPR (Spent Output Profit Ratio) Ratio. Specifically, the 'LTH-SOPR/STH-SOPR' showcased here compares the SOPR values of long-term holders to those of short-term holders, employing a 7-day Simple Moving Average. When this ratio is elevated, it suggests that long-term holders are realizing greater profits in contrast to short-term holders, a metric potentially beneficial in identifying market peaks.
Over the years, the ratio has been generally decreasing, yet we observe certain patterns where an uptick in the ratio precedes a rise in Bitcoin's price, reaching a peak before undergoing adjustments. Such patterns hint at the likelihood of long-term investors capitalizing on price ascents to realize profits, shedding light on the possible impacts of such profit-taking on market conditions.
Interpreting the current pattern, a high SOPR Ratio may signal that the market's upward momentum might have been partially cashed out by long-term investors, indicating the necessity for caution against potential price corrections or increased volatility in the future.
Written by 우민규 Woominkyu
