According to on-chain data analyst Murphy, Bitcoin long-term holders are approaching a critical point of structural capitulation. As of Feb 5, 2026, the 7-day EMA of the Long-Term Holder Realized Profit/Loss Ratio (LTH-RPRL) and the Long-Term Holder Spent Output Profit Ratio (LTH-SOPR) have both dropped to 1, indicating that long-term holders are no longer profitable on average.
Capitulation Signals Explained
Murphy notes that when these two metrics converge at 1, it suggests long-term holders are at a break-even point. A significant influx of loss-making long-term positions onto exchanges could signal the market's final bearish flush. Historically, such full-scale collapses of long-term holders have marked the violent end phase of bear markets—as seen in late 2018 and March 2020—eventually paving the way for recovery.
What History Tells Us
In previous cycles, the surrender of long-term investors was often accompanied by a sharp price decline and panic selling, followed by the birth of a new bull market. Murphy emphasizes that this indicator doesn't directly predict a price bottom but offers a useful reference framework. Notably, Bitcoin prices have been oscillating around $60,000 amid increased long-short battles, and the behavior shift among long-term holders could become a key factor breaking the deadlock.
On-chain data also reveals a contrasting trend: Bitcoin's 'ancient supply' (long-dormant coins) stagnation suggests complex market sentiment. If long-term holders collectively capitulate, it may trigger short-term volatility but also present attractive entry points for patient investors.
In summary, on-chain metrics are signaling deepening bearish conditions, yet historical patterns indicate that every major capitulation has eventually led to a new Bitcoin bull run. Investors should closely monitor on-chain developments and make decisions aligned with their risk tolerance.