Bitcoin Hasn’t Reached Bull Cycle Top Yet, Quant Explains Why
15 Julio 2024 - 11:30PM
NEWSBTC
According to the trend in an on-chain indicator, an analyst has
explained how Bitcoin may still need to reach the top of the
current bull cycle. Bitcoin aSOPR Hasn’t Yet Reached Levels
Associated With Past Cycle Tops As explained by an analyst in a
CryptoQuant Quicktake post, the Bitcoin Adjusted Spent Output
Profit Ratio (aSOPR) is yet to go as high as during the tops of the
previous cycles. Related Reading: Bitcoin Bears Crushed: $100M In
Crypto Shorts See Flush As BTC Breaks $63,000 The “SOPR” refers to
a popular on-chain indicator that basically tells us whether
cryptocurrency investors are selling their tokens at a profit or
loss right now. This metric works by going through the blockchain
history of each coin sold to see what price it was transacted at
before. If this previous price for any coin was less than the price
it’s being sold now, then its sale is leading to profit
realization. Similarly, coins of the opposite type would imply
loss-taking. The SOPR calculates the ratio between such profits and
losses being realized across the network to provide a net
situation. When the indicator’s value is greater than 1, the
investors are selling their coins at a net profit. On the other
hand, values under this mark suggest the dominance of loss
realization in the market. In the context of the current
discussion, the SOPR itself isn’t of interest here, but rather a
modified form called the “aSOPR.” This indicator adjusts the SOPR
data to exclude transactions of coins made within an hour of their
previous transfers (hence the “adjusted” in the front of the name).
Now, here is a chart that shows the trend in the 90-day exponential
moving average (EMA) Bitcoin aSOPR over the past few years: As
displayed in the above graph, the 90-day EMA Bitcoin aSOPR had
observed a rise alongside the rally earlier in the year. This
implies that investors had ramped up their profit-taking as the
coin’s price surged to a new all-time high (ATH). With the bearish
momentum that BTC has been facing since then, though, the indicator
has also seen a cooldown. At the peak of the profit
realization spree, the indicator had crossed the 1.05 mark, but now
it has come down to just 1.01. Related Reading: Bitcoin Recovery
Stalls As HODLers Apply Selling Pressure As the quant has
highlighted in the chart, the bull run tops in 2017 and 2021
occurred as the indicator approached a value of 1.1. The recent
high in the indicator has been significantly below this mark. The
peak level seen in the recent rally was similar to the one
witnessed during the peak of the April 2019 rally. This recovery
surge from the previous cycle had only been a prelude to the real
bull run that would come later, so BTC may also see something
similar play out this time. BTC Price Bitcoin has enjoyed a rally
of around 5% in the past 24 hours, taking its price back above the
$63,000 level. Featured image from Dall-E, CryptoQuant.com, chart
from TradingView.com
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