Bitcoin has recently experienced a slight dip, trading at $117,901 after a nearly 5% weekly loss. Although this downturn could indicate a wane in investor sentiment, on-chain metrics hint that the market may still have potential for growth before hitting a saturation point. Key indicators such as the activity of long-term holders and derivatives traders suggest continued interest and the likelihood of price fluctuations.
The Spent Output Profit Ratio (SOPR) for long-term holders (LTH) is one metric gaining attention. It has reached a new high for 2025, according to CryptoQuant analyst Gaah. This indicator measures the profitability of coins moved by owners who have held their Bitcoin for over 155 days. Current readings suggest that LTHs are starting to sell at a profit, but the SOPR is yet to reach the critical levels traditionally associated with market peaks.
Gaah pointed out that while the LTH SOPR has crossed the midpoint and is slightly above 2.5, it’s still far below the 4.0 level, which has historically signaled macro peaks in past cycles. This indicates that long-term investors are making profits, but not in a manner that suggests a market frenzy or widespread divestment. Higher SOPR readings above 4.0 in previous bull cycles marked the beginning of substantial corrections or cycle peaks.
The steady rise in profit-taking suggests a maturing market that still has upward potential. Gaah advises investors to view this as part of the natural progression of a bullish phase, although correction risks persist. The ongoing patterns of accumulation and realization by LTHs offer a glimpse into how confidence and caution can coexist in the market.
In related news, CryptoQuant analyst Arab Chain pointed out the continual activity in the Bitcoin derivatives market. He noted that the total number of outstanding futures contracts, or open interest, remains high near $42 billion. Though slightly down from recent peaks, this level is near historical highs and shows robust trader involvement.
Arab Chain also underlined the impact of rising funding rates on market sentiment. Presently, these funding rates show a dominance of long positions, suggesting a bullish market. However, with high open interest and increasing leveraged trades, this could also indicate a higher risk of volatility. An unexpected price shift could trigger widespread liquidations if funding becomes unsustainable, forcing exchanges to close positions.
