Bitcoin Rally Stalls as SOPR Spikes: Analyst Explains What It Means

Bitcoin’s recent climb appears to have momentarily slowed following a period of consistent upward momentum. After briefly trading above $104,000 earlier in the week, the price has since retraced to around $102,004, reflecting a modest 1.2% dip in the past 24 hours.

Despite the pullback, BTC remains up nearly 20% over the past month and is currently trading 6.4% below its all-time high of $109,000 reached in January.

CryptoQuant contributor Carmelo Alemán shared insights into the activity of long-term holders (LTHs), suggesting a potential link between the recent pullback and increasing realized profits among seasoned investors.

Bitcoin SOPR and Profit-Taking Behavior Signal Distribution Trends

According to Alemán, the Bitcoin SOPR (Spent Output Profit Ratio) for LTHs has risen significantly since March 12, marking a 71.33% growth in realized profits. This trend may reflect strategic profit-taking among investors who accumulated Bitcoin at lower prices during previous consolidation phases.

Alemán’s analysis highlights how Bitcoin’s long-term holders, those who have held BTC for more than 150 days, have steadily increased their profit margins over the past two months. As of May 13, the SOPR for LTHs reached 2.27409, indicating that coins moved by these investors were sold at an average return of 227.41%.

In practical terms, an investor who bought BTC for $50,000 would have realized roughly $113,705, with $64,000 in profit. This behavior may point to a period of cautious distribution, as experienced holders seek to lock in gains ahead of potential market corrections.

Historically, such spikes in SOPR values tend to align with the later stages of market rallies, when price volatility increases and profit-taking accelerates. Alemán suggests that while the market has yet to reach its full cycle peak, LTHs may be preparing for such a scenario by adjusting their positions accordingly. This cautious profit-taking could influence near-term price movements, particularly if short-term traders follow the lead of more seasoned market participants.

Mixed Signals from LTH Behavior: Selling Slows Despite Price Nearing ATH

In contrast to Alemán’s observation, another CryptoQuant analyst, ShayanMarkets, presented a different view of LTH behavior. According to Shayan, while the Bitcoin market is experiencing some profit-taking pressure, long-term holders are not contributing significantly to the selling activity.

This view is supported by the declining SOPR metric among LTHs, which suggests that these investors are either holding or continuing to accumulate. This divergence may indicate a shift in the market’s dynamics.

Whereas prior rallies were often met with widespread distribution from early adopters, the current trend could be characterized by stronger conviction among institutional or strategic holders. If this behavior continues, Bitcoin may resume its upward momentum once short-term selling pressure subsides. Shayan wrote:

Based on this behavior, Bitcoin is likely to resume its bullish trend following this pause, potentially leading to a fresh impulsive rally and new all-time highs in the mid-term.

Featured image created with DALL-E, Chart from TradingView