Bitcoin SOPR Suggests Market Nowhere Near The Bottom
19 Abril 2022 - 02:00PM
NEWSBTC
According to on-chain data, current Bitcoin SOPR trend suggests the
market may be nowhere near the price bottom. Bitcoin SOPR Still
Some Distance Above The “One” Level As pointed out by an analyst in
a CryptoQuant post, the BTC SOPR hints there may be some ways to go
still before a bottom forms. The “spent output profit ratio” (or
SOPR in brief) is an indicator that tells us whether investors are
selling at a profit or a loss right now. The metric works by
evaluating the history of each coin on the chain to see which price
it was last moved at. If this price was less than the current price
(that is, the selling price), then the coin sold at a profit. On
the other hand, the last price being more than the current one
would imply the investor realized a loss on this coin. Related
Reading | On-Chain Data: Bitcoin Whales Buy The Dip As BTC
Drops To $39k When SOPR has a value more than one, it means the
overall market is making a profit at the moment. While ratio values
below the threshold imply a realization of losses. Now, here is a
chart that shows the trend in the Bitcoin SOPR over the past few
years: Looks like the indicator's value is above 1 right now |
Source: CryptoQuant In the above graph, the quant has marked the
important points of trend. It seems like bottoms have historically
formed whenever the Bitcoin SOPR has dipped below the value = 1
mark. The significance of this “one” level is that investors are
just breaking even at this point. The value drops any further and
they are selling at a loss. Relate Reading | TA: Bitcoin
Recovers Losses But Here’s Why $41.5K Could Prevent Gains After
capitulation, there aren’t many sellers left in the market
normally, hence why a bottom forms during such periods. Now,
looking at the current trend, it seems like the value of the
Bitcoin SOPR is around 1.31 right now. This is still a bit above
the 1 level, which could suggest there may be more downside in the
store for the crypto before a new bottom formation takes place.
However, it’s also possible the price may see a temporary rebound
here, as it already did once earlier in the year around a similar
SOPR value. BTC Price At the time of writing, Bitcoin’s price
floats around $40.7k, up 1% in the last seven days. Over the past
month, the crypto has lost 3% in value. The below chart shows the
trend in the price of the coin over the last five days. BTC's price
looks to have surged up over the past twenty-four hours | Source:
BTCUSD on TradingView Featured image from Unsplash.com, charts from
TradingView.com, CryptoQuant.com
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