Bitcoin's 26% March rally sees 13.6% drop in long-term holder profit-taking

Bitcoin's recent rally to a new all-time high (ATH) of $111,700 has not triggered significant profit-taking from long-term holders, a trend that is helping to sustain the cryptocurrency's upward momentum. Between March 1 and May 27, the 7-day simple moving average (SMA) of the long-term holder spent output profit ratio (SOPR) increased slightly from 2.10 to 2.22, indicating a modest uptick in realized profits. However, the 30-day SMA declined from around 2.51 to 2.17 over the same period, marking a 13.6% drop. This divergence suggests that while some long-held coins were sold for profit during the ATH, the overall trend shows a slowdown in profit realization among long-term holders.

Historically, an upward-sloping 30-day LTH SOPR has signaled increased sell-side pressure. However, the declining trend observed through March, April, and May indicates that older coins remained mostly dormant despite the rally. This restraint from long-term holders implies a conviction-led holding strategy and reduced structural selling pressure, both of which are supportive of a continued rally.

Bitcoin's price gained over 26% since the beginning of March, moving from around $86,000 to an ATH of $111,700 and then down to around $109,000. Typically, such price movements would trigger heavier profit-taking across all cohorts. However, the SOPR trend shows that long-term holders are exercising restraint, which is a positive sign for the market. As of May 27, the 30-day LTH SOPR remains above 2.0, still showing profitability but well below its March highs. If the price holds above $100,000 and the metric stays flat or trends lower, it would reinforce the view that long-term holders, including a significant portion of institutional investors, are not rushing to exit. This would leave room for a continued price increase with a limited supply inflow coming from long-term holders, further supporting the rally.