A recent assessment has emerged that shows that long-term Bitcoin holders are slowly moving away from their deep gains and that this could both weigh on prices, depending on how the situation develops.

Long-term holder Average monthly SOPR sections below 1

In recent QuickTake post on CryptoQuant, pseudonymous on-chain analyst Darkfost reveals that long-term Bitcoin holders are entering a frail phase of the current cycle. This post is based on readings obtained from the BTC: Long-Term Holder (LTH) SOPR indicator, which tracks whether coins moved by long-term holders are at a profit or loss.

A SOPR value above 1 means that holders of this category are making profits on average, while a reading below 1 signals that these coins are trading at a loss. According to Darkfost, current SOPR readings have dropped below the critical level of 1 and are now around 0.98

This is a sign that Bitcoin’s LTH, which is typically the strongest investor hand in the market, is starting to see losses every month. Interestingly, the scenario is slightly different on an annual basis.

Annual LTH SOPR Still Positive, but Trend Down – Analyst

Darkfost further highlights that while the monthly time frame is leaning towards the red zone, the annualized SOPR is still in mighty positive territory, with readings around 1.84. According to the analyst, this means approximately 84% of average realized profits.

However, year-over-year profits have been on a downward trend and are slowly falling. It is worth noting that throughout the current cycle, the LTH SOPR has not charted above 3.4, which is approximately half of the readings seen at the peak of the previous cycle. Interestingly, this is also less than four times the peak of the previous two cycles, suggesting a less impulsive distribution in this cohort of investors.

Moreover, Darkfost cites historical data that shows that bear markets only took shape after the SOPR dropped to around 0.6, a level that correlates with average realized losses of around 40%. Therefore, although the current reading of the indicator is below 1 every month, it is still far from the surrender zone.

For now, holders of long-term bonds have entered a transitional phase. In a scenario where long-term holder profits continue to decline, selling pressure from this side may in turn weaken. At the time of writing, Bitcoin is trading at around $64,247, reflecting a loss of 4.85% over the last day.