Bitcoin Holders Selling At Large Losses, Is Final Capitulation Here?

Keshav Verma

1 year ago

3 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

On-chain data shows Bitcoin holders have been selling at large losses on the level of previous bottoms, suggesting that the final capitulation for the cycle may be here.

Bitcoin 7-Day MA aSOPR Has Sharply Gone Down Recently

As pointed out by an analyst in a CryptoQuant post, the BTC market participants may be coming close to surrendering.

The relevant indicator here is the “Spent Output Profit Ratio” (SOPR), which tells us whether Bitcoin investors are selling their coins at a profit or at a loss right now.

When the value of this metric is greater than 1, it means the average holder is moving their coins at a profit currently.

On the other hand, the indicator having values less than the threshold suggests the market as a whole is realizing some amount of loss at the moment.

Naturally, the SOPR having values exactly equal to 1 implies the investors are just breaking-even on their selling.

The “Adjusted SOPR” (aSOPR) is a modified version of this metric that doesn’t take into account movement of all those coins that were sold within an hour of being bought. This helps remove noise from the data that won’t have any significant impacts on the market.

Now, here is a chart that shows the trend in the 7-day moving average Bitcoin aSOPR over the last several years:

Looks like the 7-day MA value of the metric has declined in recent days | Source: CryptoQuant

As you can see in the above graph, the 7-day MA Bitcoin aSOPR has taken a deep dive below the 1 mark recently. This means that investors are now selling at some big losses.

The current levels of the indicator are the same as those observed back during the 2018-19 bear market bottom, as well as during the COVID crash.

The reason such deep capitulations have usually coincided with major bottoms in the price of the crypto is that they signify an exhaustion of selling pressure as the weak holders give up and dump their holdings at a loss.

Stronger hands then buy these coins up and accumulate at cheap prices, leading to a more positive outcome in the long term.

If the current capitulation really is the final one, then a bottom may be in sight for Bitcoin. However, bullish trend wouldn’t immediately follow the coin; the short term outcome is likely to still be bearish.

BTC Price

At the time of writing, Bitcoin’s price floats around $16.1k, down 5% in the last week.

The value of the crypto seems to have gone down during the past day | Source: BTCUSD on TradingView

Featured image from 愚木混株 cdd20 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.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.