Long-term Holders Are Moving! Bitcoin Bullish Signal Detected

▲ Bitcoin (BTC) ©Dasol Ko

An analysis suggests that Bitcoin's long-term holders are strengthening their market dominance as they re-enter profit zones. The continued rise in the on-chain indicator SOPR (Spent Output Profit Ratio) is fueling speculation about a potential end to the bear market.

According to Bitcoinist, a cryptocurrency media outlet, on May 10 (local time), CryptoQuant analyst 'Arab onchain' analyzed that the SOPR ratio of long-term holders (LTH) and short-term holders (STH) is sending a bullish market signal. SOPR is an on-chain indicator that shows whether investors are selling their held coins at a profit or a loss. Generally, a value above 1.0 indicates profit realization, while a value below 1.0 signifies loss realization.

Currently, the LTH/STH SOPR ratio has risen to 1.157, significantly exceeding the 90-day Simple Moving Average (SMA) benchmark of 0.982. This means that long-term holders are in a much higher profit state than short-term traders, which is interpreted as a typical bullish signal in the market. Bitcoinist noted that the profitability and market dominance of long-term investors are increasing simultaneously.

Arab onchain explained that Bitcoin has maintained stability around $79,943 despite recent volatility. The expansion of the SOPR ratio is analyzed as a signal of restored investor confidence and a shift in the market from a simple correction/sideways phase back to a long-term upward trend. The increasing gap between SOPR and the baseline was also positively assessed, indicating growing market maturity.

However, there is a cautionary note that if the SOPR ratio rises too quickly, there's a possibility of large-scale profit-taking by long-term holders. A surge in profit-taking sales could slow down the upward momentum or lead to a short-term correction. Nevertheless, the prevailing assessment is that the current Bitcoin market structure itself remains positive.

As of the time of writing, Bitcoin was trading at $80,741, having risen by 0.54% over 24 hours and approximately 3% over the past week. Market prediction platform Coincodex rated current market sentiment as neutral but suggested the possibility of Bitcoin rising to $86,068 within the next 5 days. However, the potential for a short-term correction remains, with a forecast target price of $90,919 for the next three months. The Fear & Greed Index currently stands at 38, indicating that caution still persists within the market.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*