TL;DR
- Despite recent price fluctuations, Bitcoin remains bullish according to a CryptoQuant analyst. The analyst points to Bitcoin’s Adjusted Spent Output Profit Ratio (aSOPR) as an indicator of potential bullish momentum.
- The aSOPR, an extremely valuable tool for examining Bitcoin, calculates the profit ratio of spent outputs. It suggests that many short-term holders are now trading Bitcoin at a loss, while long-term holders are reaping more profits.
- Despite the recent downturn in Bitcoin’s price, the aSOPR indicates that the cryptocurrency remains bullish, suggesting that investors, particularly long-term holders, should remain optimistic about Bitcoin’s future performance.
Despite recent fluctuations in the price of Bitcoin, a CryptoQuant analyst has revealed a signal that suggests the cryptocurrency remains bullish. At the time of writing, Bitcoin is trading at $62,903, down by 1% and 5.20% in the past 24 hours and seven days, respectively. However, the analyst points to Bitcoin’s Adjusted Spent Output Profit Ratio (aSOPR) as an indicator of potential bullish momentum.
The Adjusted Spent Output Profit Ratio (aSOPR), while not widely recognized, is an extremely valuable tool for examining Bitcoin. It calculates the profit ratio of spent outputs, which are transaction clusters that signify coin transfers. As per the analyst’s observation, the short-term SOPR of Bitcoin has reached a state of uncertainty, mirroring the prevailing market mood. Nonetheless, the adjusted SOPR maintains its upward, or bullish, trajectory.
This discrepancy between the SOPR and its adjusted ratio suggests that many short-term holders are now trading Bitcoin at a loss. Fascinatingly, the ratio of long-term SOPR to short-term SOPR is shifting towards the advantage of long-term holders. This implies that long-term holders are reaping more profits compared to their short-term counterparts. Consequently, the adjusted SOPR continues to exhibit a sustained bullish trend.
Short-term vs Long-term SOPR: What It Means for Bitcoin Traders
A more insightful understanding of this SOPR ratio is that the current market conditions have not been beneficial for short-term Bitcoin holders. Additionally, it indicates that the pause in the upward trend may be due to some long-term holders liquidating their assets.
As per Phi Deltalytics, if the adjusted SOPR were to flip into a bearish indicator, it would suggest the potential for a swift decline in Bitcoin’s price.
“The persistence of a bullish aSOPR amidst wavering short-term SOPR trends gives rise to the possibility of a rapid downward shift once the aSOPR trajectory reverses,” the analyst noted.
In conclusion, despite the recent downturn in Bitcoin’s price, the aSOPR indicates that the cryptocurrency remains bullish. This suggests that investors, particularly long-term holders, should remain optimistic about Bitcoin’s future performance.
