Bitcoin (BTC) Brief Rally Above $105k Triggers Increased Profit-Taking by Long-Term Holders (LTHs)

Bitcoin's brief rally above the psychological $105,000 price mark has triggered increased activity among its long-term holders (LTHs).

Bitcoin (BTC) price is in the last leg of a correction after a brief rally above the psychological $105,000 mark triggered increased activity among its long-term holders (LTHs).

According to on-chain data, there is a notable spike in realized profits within this group over the past few days.

This trend suggests that many LTH investors are beginning to take advantage of the sharp price gains by selling coins at a profit.

BTC Long-Term Investors Increase Profit-Taking

In a new report, CryptoQuant analyst Carmelo Alemán noted that BTC LTHs—investors who have held their coins for over 150 days—have significantly increased their profit-taking in recent weeks, according to on-chain data.

Alemán found that BTC’s Long-Term Holder Spent Output Profit Ratio (LTH-SOPR), which measures whether investors who have held a particular asset for over twelve months are in profit or not, reached a yearly low of 1.32 on March 12.

However, as market sentiment improved, it steadily climbed to reach 2.274 by May 13. According to Alemán, this marks a 71.33% increase in realized profits over two months, suggesting that coins spent by LTHs are being sold at much higher profit margins than earlier in the year.

As of this writing, the metric stands at 1.612.

“This suggests that LTHs are beginning to capitalize on their accumulated gains, possibly in anticipation of future corrections or in response to an overall improvement in market sentiment. This profit-taking could be key to understanding upcoming price movements, as historically, these periods have preceded significant price fluctuations in Bitcoin,” the analyst noted.

According to the analyst, spikes in BTC’s LTH-SOPR have coincided with distribution phases, where seasoned investors begin selling their holdings ahead of potential downturns. However, “the market is still far from its cycle peak.”

One may attribute this to BTC’s persistent positive funding rate. This stands at 0.0025% at press time, signaling a high demand for long positions among futures market participants.

A positive funding rate like this means that traders holding long positions (betting the price will rise) are paying a fee to those holding short positions, indicating bullish sentiment in the BTC market.