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Bitcoin: More uncertainty, more losses, and that means…

  • Bitcoin’s transactions at a loss surpassed 100 million BTC.
  • SOPR and MVRV metrics revealed tight profit margins for long-term holders.

In light of the press time state of the Bitcoin [BTC] market, there have been indications that long-term holders have been at a loss. Recent reports have shed light on the extent of these losses. 

Bitcoin transaction in losses soar

Data from Glassnode revealed that even before the FTX collapse, there were Bitcoin transactions occurring at a loss. The statistics highlighted that the press time volume of BTC transacted at a loss had surpassed 100 million.

Between 2019 and 2020, 42.8 BTC were exchanged at a loss, while from 2021 to 2023, 136.2 million BTC were transacted at a loss.

Source: Glassnode

It is important to note that these transactions incurring losses involve long-term holders. The basis for identifying these long-term holders relies on a heuristic that utilizes a 155-day threshold, roughly equivalent to five months.

BTC bear markets have typically spanned between 500 to 800 days, from the market’s peak to its bottom.

Current SOPR

According to CryptoQuant, the Bitcoin Spent Output Profit Ratio (SOPR) experienced a slight increase above one. As of this writing, the BTC SOPR stood at approximately 1.0, following a minor decline on 3 June.

This SOPR implied that long-term holders (LTHs) were selling their coins with a narrow profit margin. This observation aligned with the reported transactions at a loss highlighted by Glassnode. 

BTC long-term SOPR

Source: CryptoQuant

The BTC Long-Term Holder SOPR (Spent Output Profit Ratio) is a valuable metric employed to assess the profitability of long-term Bitcoin holders when they decide to sell their coins. It provides a straightforward interpretation: if the SOPR exceeds 1, long-term holders are selling their coins and making a profit from the transaction.

Conversely, if the SOPR falls below 1, it implies that long-term holders are selling their coins at a loss, indicating a situation of diminished profitability.

Long-term BTC MVRV

Examining the two-year Market Value to Realized Value (MVRV) ratio of Bitcoin revealed that holders within this timeframe had experienced losses. The MVRV chart indicated that BTC had remained below zero, reaching a low point of -50% around December 2022.

It also maintained a level of around -30% until March.

However, as of this writing, the MVRV ratio has improved to approximately -8.4%. It indicated reduced undervaluation and losses for Bitcoin holders in this timeframe.

Bitcoin MVRV

Source: Santiment

Read Bitcoin’s [BTC] Price Prediction 2023-24

In contrast, the 30-day MVRV ratio reflected a valuation of 15%. As of this writing, it was around -0.9%, suggesting a relatively healthier state for short-term Bitcoin holders.

Considering the daily timeframe chart, Bitcoin traded at approximately $26,840. As of this writing, it was experiencing a loss of over 1.2% following a slight gain in the previous trading period.

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