Bitcoin Long-Term Holders Show Early Capitulation Signals

Bitcoin (BTC) is showing early signs of strain among long-term holders as the LTH SOPR (Spent Output Profit Ratio) recently fell below 1.0, signaling that some holders are starting to sell at a loss.

While isolated, this move reflects growing uncertainty in the market as BTC trades near $92,000 amid mixed technical signals.

This development is significant because those holding BTC for more than six months have historically provided stability during price corrections. Their tentative selling could hint at short-term weakness or a shift in sentiment following months of accumulation.

Early LTH Capitulation and Market Reactions

The Long-Term Holder SOPR measures whether BTC moved on-chain is being sold at a profit or loss. A value above 1.0 indicates profit-taking, while a drop below 1.0 signals capitulation, where holders sell at a loss.

According to analysis shared on January 13 by market watcher Darkfost, the metric for Bitcoin held for more than six months briefly slipped under this threshold. This behavior, they said, is typically associated with bear market phases and points to selling pressure from “younger” long-term holders who bought within the last 9 months and are now in the red.

This development is happening alongside a notable reduction in positions by large investors. As previously reported, addresses holding between 1,000 and 10,000 BTC have parted with 220,000 BTC over the past year, the fastest rate of decline since early 2023.

While the 30-day average LTH SOPR remains positive at 1.18, it sits well below the annual average near 2.0, reflecting an overall drop in realized profits.

Diverging Signals and Market Outlook

The market now presents a clash of narratives. The LTH SOPR hints at strain, but other analysts are pointing to potentially constructive technical patterns. Chartist Egrag Crypto highlighted a “hidden bullish divergence” on Bitcoin’s weekly chart, where price forms higher lows while the RSI momentum indicator makes lower lows, which can precede trend continuation.

Furthermore, the Sell-Side Risk Ratio, a measure of the scale of profits and losses being realized, has returned to levels last seen in October 2023, implying distribution is happening with less conviction.

Looking ahead, the path for BTC appears contingent on a clear break from its current range. Over the past week, it has traded between roughly $90,000 and $92,400, showing modest volatility. In the last 24 hours, the price rose 1.7% to around $92,200, with short-term holders nearing profitability, as noted by investor CW.

Meanwhile, analysts suggest that reclaiming the $92,000–$94,000 zone could trigger renewed buying, but repeated resistance attempts, potentially the eighth or ninth in recent weeks, per Ted Pillows, may exhaust momentum.

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