Bitcoin Long-Term Holders (LTH, investors with holdings of more than 150 days) have significantly increased their realized profits over the past two months. March 12 marked the lowest SOPR for LTHs this year, with a value of 1.3273. Since then, it has steadily increased, reaching 2.27409 on May 13, reflecting a 71.33% growth, as shown in Bitcoin's Long Term Holder SOPR charts 1 and 2.
This rise in realized profits indicates that coins recently spent by LTHs were sold at significantly higher profit margins than in previous months, with an average return of 227.41% as of May 13. This means that if someone had invested $50k, they could have realized approximately $113,705 in total, with nearly $64k in pure profit. This suggests that LTHs are beginning to capitalize on their accumulated gains, possibly in anticipation of future corrections or in response to an overall improvement in market sentiment. This profit-taking could be key to understanding upcoming price movements, as historically, these periods have preceded significant price fluctuations in Bitcoin.
Historically, these peaks in SOPR are often associated with distribution phases (selling), where more experienced investors take the opportunity to realize profits before potential corrections. This dynamic is crucial for understanding the forces driving Bitcoin's market cycles and how they can influence short- and medium-term price movements.
Although the market is still far from its cycle peak, Long-Term Holders have begun to consolidate their positions, taking advantage of opportunities to lock in gains. This behavior reflects growing confidence in the market but also suggests that these investors are carefully evaluating their next moves, aiming to maximize returns before the next point of overvaluation is reached.
Signed by Carmelo Alemán, Verified On-Chain Analyst at Cryptoquant
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Written by Carmelo_Alemán
