On-chain analytics firm Glassnode has revealed how the Bitcoin price often forms local bottoms when this holder group shows capitulation.
Bitcoin is currently in such a phase, with a notable amount of supply having a cost basis in the zone between the latest spot price and $120,000, as the below chart shows.
When the value of the SOPR is greater than 1, it means the average holder is selling their coins at a profit. On the other hand, it being below the threshold suggests loss-taking is dominant on the network.
In the current discussion, the SOPR of the entire market isn’t of interest, but rather that of a specific part of it: the top buyers. These would be the investors who got into the cryptocurrency over the last three months.
Here is the chart shared by Glassnode that shows the trend in the Bitcoin SOPR for the investor cohorts falling in this age range:
As is visible in the above graph, the Bitcoin SOPR has dropped for all three of 1 day to 1 week, 1 week to 1 month, and 1 month to 3 months groups following the price decline.
The indicator is now floating between 0.96 to 1.01 across these cohorts, indicating these investors have started selling at a mild loss. “If pressure builds, local bottoms often form when this group capitulates, typically when SOPR drops below ~0.9,” notes Glassnode.
At the time of writing, Bitcoin is trading around $116,000, down 2% over the past week.
