Bitcoin's Long-Term Holder Profit-Taking Declines: Is Smart Money Finished Selling?

Bitcoin remains under the $80,000 mark as the cryptocurrency market faces ongoing selling pressure and increased uncertainty. The recent price trends highlight a delicate market, where buyers show little conviction in countering downward movements, and overall investor sentiment leans defensive. With volatility continuing, analysts are examining on-chain metrics to determine whether the market is reaching a state of exhaustion or if further declines are on the horizon.

Key Takeaways

Bitcoin's price remains below $80,000 amid selling pressure.
The Spent Output Profit Ratio (SOPR) has fallen to its lowest in a year, indicating reduced profitability for holders.
Long-term holders (LTHs) are showing reluctance to sell, aligning more with short-term holders (STHs).
Current market dynamics may suggest either stabilization or continued consolidation.

Bitcoin LTH Profit-Taking Collapses: Is Smart Money Done Selling?

Falling Profitability Among Holders

A recent analysis from CryptoQuant points to a significant decline in the profitability of Bitcoin holders, based on the Spent Output Profit Ratio (SOPR). This ratio, which indicates whether coins are being spent at a profit or loss, has dropped to its lowest point in a year. This change suggests that many long-term holders are either accepting much lower profits or opting not to sell at current prices.

Notably, this trend has also seen long-term and short-term holders moving closer together in behavior. The SOPR ratio nearing the critical 1.0 level reflects a hesitance from long-term holders to sell into a weakening market, even as short-term participants are incurring losses.

With Bitcoin remaining below significant psychological price levels, market observers will be closely following the SOPR's development. Whether this situation indicates an early stabilization or a temporary pause before more significant declines is yet to be determined.

SOPR Indicates Exhaustion, Not Capitulation

According to the report, Bitcoin's recent price movement has paralleled the decline in the SOPR. The price of Bitcoin reached a local low around $77,900, aligning with the notable drop in the SOPR. This relationship indicates that selling pressure has increased as holder profitability decreases, which supports the idea that the market has entered a phase of stress rather than a typical pullback.

Bitcoin SOPR Ratio | Source: CryptoQuant

From a sentiment standpoint, low SOPR levels historically coincide with periods when "smart money" reduces its selling activity. When coins do not yield significant profits upon being sold, long-term holders tend to pull back, reducing selling pressure in the market. Past instances of similar SOPR readings have preceded accumulation phases or the establishment of temporary market floors, although the timing has varied across cycles.

Currently, two scenarios are emerging. If the SOPR stabilizes around the 1.0 mark, it may indicate that the major sell-off from long-term holders is nearly complete, potentially allowing for a relief rebound as some buying demand returns. On the flip side, the sharp price decline raises the chances of prolonged sideways movement as the market navigates the recent volatility before formulating a clearer direction.

In essence, the data suggests a cleansing of the market. With the SOPR at annual lows, less committed investors seem to have exited, pivoting the focus toward longer-term value considerations rather than immediate fear-driven reactions.

Bitcoin Faces Challenges Below Key Averages

Bitcoin's weekly performance illustrates a market under continuous strain, despite a slight recovery from recent lows. Currently, the price hovers near the $78,000 mark after a brief dip into the mid-$70,000 range, which has functioned as a critical short-term support zone. However, this rebound has so far not gained traction and does not indicate a definitive trend reversal.

BTC testing fresh demand | Source: BTCUSDT chart on TradingView

From a technical perspective, Bitcoin continues to trade below its key moving averages. It is considerably under both the 100-day and 200-day averages, which are currently trending downward. This situation reinforces a bearsih outlook where price rallies are being sold off rather than being met with aggressive buying. The former support levels between $85,000 and $90,000 have now turned into resistance, indicating a significant shift in market structure compared to late 2025.

The decline into the $74,000 to $76,000 range was marked by high trading volume, while the subsequent bounce has occurred with noticeably lower participation. This divergence suggests that the latest price action may be driven more by short covering or tactical buying rather than a renewed interest from long-term investors.

Overall, Bitcoin appears to be transitioning from a distribution phase into a period of consolidation or correction. As long as it remains below reclaimed resistance levels and fails to regain key moving averages, the risks for further downside persist.

Featured image from ChatGPT, chart from TradingView.com