Bitcoin [BTC] has yet to establish a sustained bullish structure since dropping to $62,000 earlier in February. Although the asset is trading 15.8% higher at $71,800, the price remains significantly below its all-time high, leaving the recovery vulnerable to renewed selling pressure.
The recent recovery has not removed the downside risk. Long-term shareholder behavior remains an important variable, as historically shrinking profitability can increase the incentive to exit positions.
In highly volatile conditions, even modest shifts in LTH conviction can materially impact price direction.
The profitability of LTH versus STH indicates a bearish bias
Data about the chain reinforces this risk; Market structure indicators suggest that BTC is in a broader bearish phase, with price stability masking the potential for further downside.
This assessment is supported by the Spent Output Profit Ratio (LTH/STH SOPR) of the long-term holder to the short-term holder. The measure compares the achieved profitability between both cohorts.
At the time of writing, the readings showed that short-term holders were more profitable than long-term holders, confirming a bearish skew in the market structure.
Source: Alpharactal
When long-term holders’ profitability declines, selling pressure may increase as investors try to secure remaining profits. If LTHs start to distribute supply, it could dampen prices and sentiment, especially in an environment where demand remains subdued.
Long-term holders are defined as addresses that hold Bitcoin for more than 155 days, while short-term holders hold for 155 days or less.
Long term holders continue to accumulate
Despite declining relative profitability, long-term investors remain largely inactive. Data from the chain shows no significant increase in distribution from this cohort, indicating that belief remains intact.
Binary Coin Days Destroyed (CDD) supports this view. The metric indicates that older coins are not being moved, confirming that long-term holders continue to hold their Bitcoin despite current market conditions.
Source: CryptoQuant
This behavior corresponds to a gradual increase in Net Unrealized Gain/Loss (NUPL), which has risen steadily to 0.21 at the time of writing. A reading above the neutral level of 0 indicates that investors are overall more profitable than five days earlier.
Rising overall profitability could explain why long-term investors remain patient as they appear to position themselves for a broader shift to higher returns.
Bitcoin dominance and capital flows
At the time of writing, Bitcoin’s dominance stood at 58%, reflecting its share of the total crypto market capitalization MintGlass. This level indicates a balance between supply and demand, which has kept prices relatively stable.
A sustained increase of 5% or more in dominance would generally indicate new capital inflows. However, this did not materialize. CoinMarketCap facts shows that approximately $1.12 trillion has been wiped out of Bitcoin’s market cap since its all-time high.
Without a gradual return of capital on this scale, the price is likely to remain capped, with Bitcoin continuing to trade at the low end of its current range.
Final thoughts
- LTH profitability has fallen below that of STHs, a structure often associated with bearish market dominance.
- Bitcoin’s overall profitability continues to improve as holders across all cohorts remain largely inactive.