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

[Ben Graham]

Bitcoin continues to trade below the $80,000 level as the market remains under sustained selling pressure and heightened uncertainty. Recent price action reflects a fragile environment in which downside moves are met with limited conviction from buyers, while broader risk sentiment across crypto stays defensive. As volatility persists, analysts are increasingly focused on on-chain indicators to assess whether the market is approaching exhaustion—or if further downside still lies ahead.

A new report from CryptoQuant highlights a notable deterioration in holder profitability through the Spent Output Profit Ratio (SOPR), which has fallen to its lowest levels of the past year. The SOPR measures whether coins being spent are moving at a profit or a loss, offering insight into the behavior of different investor cohorts during periods of stress.

One key observation is the convergence between long-term holders (LTHs) and short-term holders (STHs). The SOPR ratio has dropped sharply toward the critical 1.0 level, indicating that long-term holders are realizing significantly less profit than before—or are choosing to stop selling altogether at current prices. This behavior suggests a growing reluctance to distribute coins into weakness, even as short-term participants continue to face losses.

With Bitcoin still below key psychological levels, the evolution of SOPR will be closely watched. Whether this shift marks early stabilization or simply a pause before deeper capitulation remains an open question for the weeks ahead.

SOPR Signals Selling Exhaustion, Not Capitulation

The report adds that Bitcoin’s recent price action closely mirrors the deterioration seen in SOPR. The price (black line) has reached a local low near $77,900. Aligning with the sharp drop in the ratio toward its lowest levels of the past year. This synchronization suggests that realized selling pressure has intensified alongside the decline in profitability, reinforcing the view that the market has moved into a stress phase rather than a routine pullback.

From a sentiment perspective, historically depressed SOPR readings have often coincided with moments when so-called “smart money” reduces selling activity. When coins are no longer being spent at a meaningful profit, long-term holders tend to step back, allowing selling pressure to subside. In past cycles, similar conditions have preceded periods of accumulation or the formation of local market floors. Although timing has varied widely.

Two scenarios now stand out. If the SOPR stabilizes around the 1.0 level, it would suggest that heavy distribution from long-term investors is largely exhausted. Creating room for a relief bounce as marginal demand returns. Alternatively, the steep, momentum-driven drop in price increases the likelihood of extended sideways consolidation, as the market digests recent volatility before establishing a clearer trend.

In summary, the data points to a flush market. With SOPR at yearly lows, weaker hands appear to have exited, shifting the balance toward longer-term value considerations over short-term fear.

Bitcoin Struggles Below Key Averages

Bitcoin’s weekly chart highlights a market under sustained pressure, despite a modest rebound off recent lows. Price is currently hovering around the $78,000 area after briefly dipping toward the mid-$70,000s, a zone that has acted as an important short-term demand pocket. This bounce, however, has so far lacked follow-through and does not yet signal a structural trend reversal.

From a technical perspective, Bitcoin remains below its major moving averages. The price is trading well under the 100-day and 200-day averages, both of which are now sloping downward. This configuration reinforces the broader bearish bias and suggests that rallies are still being sold into rather than accumulated aggressively. The prior support region between $85,000 and $90,000 has clearly flipped into resistance. Confirming a change in market structure compared to late 2025.

The sell-off into the $74,000–$76,000 range was accompanied by elevated volume. The subsequent rebound has occurred on comparatively lighter participation. This divergence implies short-covering or tactical buying rather than renewed conviction from longer-term investors.

Structurally, Bitcoin appears to be transitioning from a distribution phase into a consolidation or corrective regime. As long as the price remains below reclaimed resistance and fails to regain key moving averages, downside risks remain active.

Featured image from ChatGPT, chart from TradingView.com