Monday 15 August 2022
Home / none / This On-Chain Indicator Suggests Bitcoin Still Only 1/3rd Into Bear Market

This On-Chain Indicator Suggests Bitcoin Still Only 1/3rd Into Bear Market

The Bitcoin long-term holder SOPR may suggest that the crypto has still only gone one-third of the way through the latest bear market.

Bitcoin 20-day SMA Long-Term Holder SOPR Has Only Been 86 Days Into Bottoming Zone

As pointed out by an analyst in a CryptoQuant post, the crypto is still only 1/3rd of the way into the 260 days average historical bottoming period.

The relevant indicator here is the “Spent Output Profit Ratio” (or SOPR in brief), which tells us about whether the average Bitcoin investor is selling at a profit or at a loss right now.

5 BTC + 300 Free Spins for new players & 15 BTC + 35.000 Free Spins every month, only at mBitcasino. Play Now!

The metric works by looking at the history of each coin being sold on the chain to see what price it was last moved at. If this previous selling price was less than the latest BTC value, then the coin has just been sold at a profit. While if the last value was more than the current one, then that particular coin realized some loss.

When the value of the SOPR is greater than one, it means the market as a whole is selling at a profit right now.

Related Reading: Bitcoin Funding Rates Turn Positive, Why The Rally May Not Be Over

On the other hand, the indicator being less than one implies the average holder is moving coins at a loss at the moment.

BitStarz Player Lands $2,459,124 Record Win! Could you be next big winner? Get 110 USDT Futures Bonus for FREE!

The “long-term holders” (LTHs) is the Bitcoin cohort that includes all investors who have held onto their coins for at least 155 days without selling or moving them.

Now, here is a chart that shows the trend in the BTC SOPR (20-day MA) specifically for these LTHs over the the last several years:

Bitcoin Long-Term Holder SOPR

Read our comparison of 50 different crypto casinos. Find out who has most generous bonuses, best UX, knowledgeable customer support and best provably fair games.

Looks like the value of the metric has been pretty low recently | Source: CryptoQuant

As you can see in the above graph, the Bitcoin LTH SOPR (20-day SMA) dipped below the “one” mark a while back.

Also, in the chart the quant has marked all the relevant zones of trend for the indicator in relation to the bear market.

Related Reading: Here’s What Bitcoin Institutional Inflows Says About The Month Of July

It seems like historical bottoming periods have lasted whenever the metric has been stuck below the breakeven point.

On average, past bear markets have lasted around 260 days based on the LTH SOPR. In the current cycle, the coin has so far been 86 days into the bottoming zone.

This would suggest that if Bitcoin ends this bear market in about the same time as the average, then the crypto is still only one-third of the way through.

BTC Price

At the time of writing, Bitcoin’s price floats around $23k, down 2% in the last week. Over the past month, the coin has gained 13% in value.

Bitcoin Price Chart

The value of the crypto seems to have been moving sideways during the last few days | Source: BTCUSD on TradingView
Featured image from mana5280 on Unsplash.com, charts from TradingView.com, CryptoQuant.com

Original Article

About Sean Patterson

Check Also

NFT games have edge over ‘money in, no money out’ games: Polygon’s Urvit Goel

Polygon’s vice president of global business development for gaming, Urvit Goel, believes games that integrate nonfungible tokens (NFTs) have a natural edge on traditional games that don’t allow users to sell their in-game items. Goel spoke candidly with Cointelegraph in Seoul last week about Polygon’s push toward helping NFT games proliferate and why game publishers in South Korea like Neowiz and Nexon are diving headfirst into the space. One of the main arguments Goel made is that the traditional business model that NFT games are competing against may be inherently weaker. In traditional gaming, users typically buy in-game items with real money, but they cannot sell those items to get back any United States dollar value. However, with most games in the gaming finance (GameFi) space, users can buy items as nonfungible tokens and sell them when they are done playing the game. Goel referred to the traditional model as “money in, no money out,” and emphasized that gamers should be able to..

Leave a Reply

Your email address will not be published. Required fields are marked *