Indicator Overview

The LTH/STH SOPR Ratio is a macro-sentiment oscillator that measures the relative profitability between Bitcoin’s smart money (Long-Term Holders) and market liquidity (Short-Term Holders). By dividing LTH SOPR by STH SOPR, the indicator highlights structural shifts in profit-taking behaviour, identifying periods where long-term investors are either realising significantly higher profits than speculators or undergoing extreme relative distress.

The red gradient visualises the intensity of this ratio on a logarithmic scale. As the ratio accelerates upward, it signals that long-term holders are capturing the lion's share of market profits, a hallmark of late-stage bull runs. Conversely, when the ratio collapses, it indicates a narrowing of the profitability gap, often seen during market transitions and resets.

How To Use

Investors can use this ratio to distinguish between healthy bull market pullbacks and terminal macro peaks, as well as to identify generational buying opportunities when the ratio enters extreme compression.

• Gradient Intensity: The colour-mapped line shifts from dark reds toward bright oranges and yellows as the ratio increases. High intensity (yellow/white) typically coincides with the vertical blow-off stages of a bull market where LTHs are exiting into massive liquidity.

• The 0.75 Signal Dots: The script plots premium red markers on the BTC price line whenever the ratio falls to 0.75 or below. These dots highlight relative LTH distress, marking historical zones of extreme structural undervaluation where short-term holders are actually realising higher profit multiples than long-term holders.

• Macro Divergence: A declining ratio during rising prices often signals a passing of the torch from LTHs to STH speculators, providing a leading warning of local or macro exhaustion.