Bitcoin's LTH SOPR and the Potential for a Structural Bottom

The Bitcoin market in late 2025 is at a critical juncture, marked by a confluence of on-chain sentiment shifts, capitulation dynamics, and technical indicators that suggest the formation of a structural bottom. At the heart of this analysis lies the Long-Term Holder (LTH) Spent Output Profit Ratio (SOPR), a metric that has dipped below 1.0 for the first time in over a year. This development, combined with stabilizing LTH supply levels and broader market behavior, signals early capitulation among long-term holders-a historically reliable precursor to major bullish cycles.

LTH SOPR: A Barometer of On-Chain Sentiment

The LTH SOPR measures the average profit or loss realized by Bitcoin holders who have held their coins for more than 155 days. A value above 1.0 indicates net profits, while a drop below 1.0 signals losses. As of December 2025, the LTH SOPR has fallen below 1.0, reflecting that some long-term holders are selling at a loss. This is a stark departure from the 30-day average of 1.18, which, while significantly lower than the annual average of 2.0, still suggests a gradual erosion of realized gains.

The decline in LTH SOPR is not an isolated event. Large investors-those holding between 1,000 and 10,000 BTC-have been liquidating positions at the fastest rate since early 2023, parting with 220,000 BTC over the past year. This accelerated distribution, coupled with the LTH supply remaining slightly below its all-time high of 16 million BTC (80% of the circulating supply), indicates a mix of profit-taking and growing uncertainty among long-term holders.

Capitulation Dynamics: A Historical Perspective

Capitulation in the Bitcoin market is often characterized by a synchronized breakdown in both LTH and STH (Short-Term Holder) sentiment. In December 2025, this pattern is evident. Short-term holders have already signaled capitulation, with their SOPR falling below 1.0 and the Profit/Loss Block Indicator hitting -3-a level historically associated with extreme bearishness. Meanwhile, LTHs are now following suit, creating a "double capitulation" scenario that has historically marked turning points in the market cycle.

Historical data shows that such capitulation phases often precede major bull runs. For example, the 2018 bear market bottom was preceded by a similar collapse in SOPR metrics, followed by a 2019–2021 bull cycle that saw Bitcoin rise from $3,500 to $64,000. The 2025 capitulation appears to mirror this pattern, with the added context of a historic $300 billion distribution by LTHs in 2025-a structural reset that could clear the path for renewed accumulation.

Technical Indicators and Market Timing

Beyond on-chain sentiment, technical indicators reinforce the case for a structural bottom. The Puell Multiple has entered a "buy" zone-a signal that has historically preceded major bull runs. Additionally, Bitcoin is in a volatility squeeze, consolidating above $88,000 with key resistance at $94,253. This consolidation phase, combined with a hidden bullish divergence, suggests that the market is digesting recent selling pressure while building momentum for a potential breakout.

The Sell-Side Risk Ratio, which gauges the conviction of sellers, has returned to levels last seen in October 2023, indicating that current distribution is occurring with less urgency than in previous cycles. This "less-convincing" capitulation is a positive sign for buyers, as it suggests that the worst of the selling pressure may already be priced in.

Strategic Implications for Investors

For investors, the current environment presents a unique opportunity to accumulate Bitcoin at a structural inflection point. The combination of LTH SOPR below 1.0, stabilizing LTH supply, and favorable technical indicators suggests that the market is nearing a phase where buying demand could outstrip selling pressure. Historical precedents indicate that such conditions often lead to multi-year bull cycles, particularly when macroeconomic fundamentals align with on-chain strength.

However, caution is warranted. The path to a new bull market is unlikely to be linear. Short-term volatility and further consolidation are probable as the market digests the $300 billion in LTH-distributed supply. Investors should prioritize risk management, using the current price range of $85,450–$92,400 as a reference for strategic entry points.

Conclusion

Bitcoin's LTH SOPR dropping below 1.0, combined with broader capitulation signals and favorable technical indicators, paints a compelling case for a structural bottom forming in late 2025. While the immediate future may involve continued consolidation, the historical context and on-chain dynamics suggest that this phase could precede a new bullish cycle. For investors with a long-term horizon, the current environment offers a rare opportunity to position for what could be one of the most significant bull runs in Bitcoin's history.