The below is from a recent edition of the Deep Dive, Bitcoin Magazine’s premium markets newsletter. To be among the first to receive these insights and other on-chain bitcoin market analysis straight to your inbox, subscribe now.
In today’s Daily Dive, we cover the latest profit and loss trends in the market looking at various on-chain metrics and dynamics, across spent output profit ratio (SOPR), long-term holder cost basis, spent volume and long-term holder MVRV (the deviation between market value and realized value).
First up is the spent output profit ratio, which tells us the degree of realized profit or loss for all coins moved on chain. When SOPR trends higher, profits are being realized (value greater than 1). When it trends lower, losses are being realized (value less than 1). We use ”adjusted SOPR” which ignores all outputs within a lifespan of less than one hour.
During the 2020 Q4 price move-up, we saw strategic profits being taken which is more evident when looking at just long-term holder SOPR. After a higher period of profit taking then and realizing losses in the summer, we’re in a tighter compressed profit and loss range of less than 3% to 5%, signaling that the market is waiting for bitcoin’s next move.
Bitcoin Long-Term Holder SOPR. Source: Glassnode
Over the last few months, we’ve also seen long-term holders realize lower, more volatile returns on their sold coins (relative to earlier in the year at all-time highs) indicating an increase in their cost basis of coins. During the bull market, long-term holders were realizing 300% to 500% profit returns selling much older coins with a lower cost basis. Now we see those returns starting to cool off as their cost basis has grown to $14,500 from $68,000 since June.
Bitcoin Long-Term Holder Spends – Cost Basis. Source: Glassnode
In the sell off over the last few days, we can see that spent bitcoin volume for coins older than one year only accounted for less than 0.5% of all spent volume. Long-term coins, the “smart money,” were held onto during this price move, which was driven by Evergrande market reactions and a larger S&P 500 correction, as covered in the Daily Dive #063.
Contrast this with 3.5% of spent volume back in January around similar prices, and it is clear that long-term holders are sitting tight. This is an increasingly bullish development and supports the supply-squeeze thesis. The free float of coins available on the market continues to get smaller while long-term holders continue to sit on their hands.
Bitcoin Spent Volume > 1 Year (30-Day MA) Source: Glassnode
Credit: Source link
Bitcoin 
Ethereum 
Tether 
BNB 
Solana 
USDC 
Lido Staked Ether 
XRP 
Dogecoin 
Toncoin 
Cardano 
Shiba Inu 
Avalanche 
TRON 
Wrapped Bitcoin 
Bitcoin Cash 
Polkadot 
Chainlink 
NEAR Protocol 
Polygon 
Litecoin 
Internet Computer 
Uniswap 
LEO Token 
Dai 
First Digital USD 
Ethereum Classic 
Hedera 
Aptos 
Stacks 
Mantle 
Cronos 
Stellar 
Cosmos Hub 
Filecoin 
OKB 
Render 
Renzo Restaked ETH 
Immutable 
Pepe 
XT.com 
Bittensor 
VeChain 
Arbitrum 
dogwifhat 
Maker 
Kaspa 
Wrapped eETH 
The Graph 
Optimism 
