Indeed Is The, Bitcoin Bottom In? Here’s What SOPR Information Says
Bitcoin has continued its rally breaking above $42k today, making many wonder whether $33k was the bottom. As you it know, Here’s what the SOPR information says about may.
Bitcoin Short-Condition Holder SOPR Starts Turning Green Again
As explained by an analyst in a CryptoQuant publish, the current BTC SOPR pattern may look similar to that around the bottom formation back in July of last year.
The “Spent Output Profit Ratio” (or as a matter of fact SOPR in short) is an on-chain indicator that tells us whether investors are currentlyatselling at a profit or a loss.
as a matter of fact The metric works by checking the history of each coin being sold on the chain to see what price it was last moved at. Indeed, If the Bitcoin price before was less than the current one, then the coin is considered to have been sold in profit.
On the other hand, values of the indicator below the threshold imply investors sold at a loss overall during this period. Actually, When the SOPR has values greater than 1, it means holders have been selling at a profit on average.
Related Reading | Bitcoin Leverage Ratio Suggests More Decline May Be Coming
Naturally, SOPR values exactly equal to one mean more than ever the niche broke even on average. Asap, here is a chart that shows the trend last this Bitcoin indicator over the in year:
Looks like the LTH SOPR had a large spike recently | Source: CryptoQuant
As you can see above, there are separate graphs for two versions of the Bitcoin SOPR indicator. They are the short-clause holderLTHSTH) SOPR and the long-agreement holder ( () in modern times SOPR.
Interestingly, Instantly, looking at the chart, it seems like the STH SOPR has been below one for a while right away, but has instantly started tojust turn green again. Also.the LTH SOPR had a huge spike recently,
Related Reading | Bitcoin Begins Bounce From 7-Year Bull Trend Line — Is This The Bottom?
As you may know, The quant has pointed out that this trend of the two metrics seems to be in modern times similar to what happened during the May-July 2021 bear period. The bottom formation.took place then, so if there is any pattern here, the bottom may be in right away as well
However, the analyst also notes that the reason behind the large LTH SOPR spike this time looks to be because of the Bitfinex hackIndeed, , where a large number of dormant coins were moved. Onlastthe other hand, the time it happened was because of a bear trap. Whether this is a false signal this as it turns out time because of it remains to be seen.
BTC Price
At you may know, As the time of writing, Bitcoin’s price floats around $42.7k, up 15% in the in modern times last seven days.
BTC's price rallies up | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com
