This Bitcoin Metric Continues To Retest Bear-Bull Junction, Will A Break Happen?

Keshav Verma

Last Updated: June 11, 2024 8:00 am

3 mins read

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On-chain data shows a Bitcoin indicator has continued to retest the bear-bull transition point recently, but is yet to obtain a break.

Bitcoin Short-Term Holder SOPR Is Retesting The Break-Even Level

As pointed out by an analyst in a CryptoQuant post, the short-term holders have continued to sell at a loss recently. The relevant indicator here is the “Spent Output Profit Ratio” (SOPR), which tells us whether the average investor in the Bitcoin market is selling at a profit or at a loss right now.

When the value of this metric is greater than 1, it means that the overall market is realizing more profits than losses with their selling currently. On the other hand, values under the threshold suggest the dominance of loss-taking in the sector.

The SOPR being exactly equal to 1 implies that the total amount of profits being realized by the investors are exactly canceling out the losses, and thus, the average holder can be thought to be just breaking even on their sales.

Now, here is a chart that shows the trend in the Bitcoin SOPR over the last couple of years:

Looks like the value of the metric has been near the break-even mark for both of these metrics | Source: CryptoQuant

As displayed in the bottom graph in the image, the Bitcoin ASOPR has been consolidating around the 1 mark recently. The ‘A’ in front of SOPR here refers to “Adjusted,” since the indicator has been adjusted to filter out the sales of coins that were sold within one hour of their previous sales.

From the graph, it’s visible that the Bitcoin ASOPR has constantly remained slightly inside the loss region recently as it has been retesting the break-even mark from below. This means that the average holder can be assumed to be selling at a slight loss right now.

The indicator has made many attempts to break into the profit territory, but it hasn’t found any success so far. Historically, the ASOPR has been inside the red zone during bearish periods, while it has been in the green region during bullish periods.

An indicator that displays this relationship even more closely is the short-term holder SOPR. The “short-term holders” (STHs) here refer to investors who have been holding their coins for less than 155 days.

As is visible in the graph, whenever the Bitcoin SOPR for these investors has entered inside the profit zone, the price has experienced some uptrend. Much like the metric’s value for the overall market, though, the STH SOPR has also been inside the red zone recently, with these holders in fact registering more losses than the rest of the sector.

Currently, the indicator is once again sitting at the break-even mark. This retest could be one to watch for, as if a break is found, a bullish trend could follow, much like it did during the instances during the past few months.

BTC Price

Bitcoin has observed a sharp surge in the past day as its price has now crossed the $27,000 level.

The value of the coin seems to have registered a rapid rise today | Source: BTCUSD on TradingView

Featured image from Art Rachen on Unsplash.com, charts from TradingView.com, CryptoQuant.com

Keshav Verma

Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.

Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.

In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.

Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.

Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..

Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.

Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.

As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.

Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.

Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.

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