Bitcoin LTH Profitability Outpaces STHs: Is A New Bullish Phase About To Commence?

Crypto analyst with the username PelinayPA has noted a recent shift in Bitcoin traders’ profitability with potentially strong bullish implications. Notably, the premier cryptocurrency continues to trade within the $115,000 price region after earlier price gains on Thursday were followed by a correction of equal measure.

SOPR Ratio Trends Up: Market Signals Point To New Bitcoin Rally

In a QuickTake post on September 19, PelinayPA shares some potential insights into Bitcoin’s future trajectory based on the latest Spent Output Profit Ratio (SOPR) developments. For context, the SOPR is an on-chain metric that reflects whether Bitcoin investors are selling their coins at a profit or a loss.

However, this metric can also be used to gauge the balance of profitability between long-term holders and short-term holders when we compare the SOPR Ratios of both parties, i.e, LTH/STH SOPR. When the ratio is high (LTH > STH), it indicates that seasoned investors are more profitable, often signaling the beginning or continuation of a sustainable bull market.

Conversely, when the ratio is low (LTH < STH), it suggests that short-term traders are outperforming, typically occurring during market tops or in the early stages of bear markets. Looking at historical cycles, PelinayPA explains that the indicator has proven to be a reliable lens into Bitcoin’s investor dynamics and various market conditions. For example, in the 2020–2021 bull run, the ratio remained moderate as short-term traders recorded substantial gains alongside long-term holders, establishing an unsustainable rally and weak market top, eventually triggering a significant price correction. PelinayPA also references the depths of the 2022–2024 bear market during the SOPR ratio remained suppressed, reflecting weak profitability among long-term holders, but as Bitcoin began its recovery through 2023 and 2024, the metric started climbing again, hinting at a potential structural shift to a new bull phase.

In the present market,  the LTH/STH SOPR ratio is balanced but moving upward, a sign that long-term holders are regaining their advantage. PelinayPA suggests this could mark the early stages of a new bull cycle, with indicators pointing to $120,000 as the next major upside technical target.

Bitcoin Whale Accumulation Remains High

In other news, US-based institutions and whales continue to accumulate substantial levels of Bitcoin regardless of price movements. Market analyst Darkfost reports that Coinbase Premium has turned consistently positive since April, reflecting stronger institutional demand from US traders compared to entities on other trading platforms, such as Binance. At the time of writing, Bitcoin trades at $115,668 after a net 0.35% loss in the past seven days.