Is Too Late To Accumulate Bitcoin? What This Indicator Says

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As a seasoned analyst with over two decades of experience in the financial markets under my belt, I find the current state of Bitcoin’s 150-day MA aSOPR intriguing. With a value of 1.01, it suggests that investors are currently realizing more profits than losses – a trend that has persisted throughout this year.

Based on the historical trend of a blockchain signal, it seems this pattern might be indicating whether it’s still a good time to amass Bitcoin or if that period has passed.

Bitcoin 150-Day MA aSOPR Currently Has A Value Of 1.01

According to a recent post by an analyst on CryptoQuant, the current value of the 150-day moving average for Bitcoin’s Adjusted Spent Output Profit Ratio (aSOPR) is 1.01. In simpler terms, this ratio indicates whether Bitcoin investors are currently selling their coins at a profit or a loss. Essentially, when the aSOPR is above 1, it suggests that sellers are typically realizing profits, while a value below 1 implies that they’re usually selling at a loss.

This method examines the past transactions of all tokens, specifically sales and transfers, to determine the prices at which they were traded before the current transaction. If the current selling price of a coin is higher than its previous trading price, that suggests the sale might be a profit-taking event.

In a similar manner, coins with the opposite value could contribute to the total amount of losses being recognized. The All-Time Spent Output Profit Ratio (aSOPR) takes these gains and losses being realized throughout the network into account, and then determines the proportion between them.

In this particular metric, the term “adjusted” refers to the removal of coin transfers that occurred within an hour after their previous one. These transactions typically have minimal impact on the broader market, making it logical to exclude them from the data analysis.

graph illustrating the development of the 150-day Moving Average of Bitcoin’s SOPR indicator for the past couple of years.

This year, the 150-day moving average of the Bitcoin SOPR (Spent Output Profit Ratio) has persistently stayed above 1 on the graph provided. This suggests that overall, investors have been making more money from selling Bitcoins at a profit rather than at a loss.

At the start of the year, the indicator peaked at 1.04 due to investors cashing in during the market surge. However, as the prolonged consolidation of cryptocurrency persists, it’s value has dropped, currently standing at 1.01.

In the provided chart, the analyst has pointed out two areas that have traditionally been important for the aSOPR. The first area is below 0.98, where significant bottoms usually form. At such low levels, investors are actively selling off their coins, marking substantial loss realizations. Strong hands often buy these sold-off coins from distressed sellers, thus contributing to the price rebound.

In a higher region, above 1.08, historical price tops for Bitcoin have been established due to large investors (whales) aggressively cashing out their profits. However, during the ongoing cycle, Bitcoin’s realized spend per output profit ratio (aSOPR) has yet to reach this territory.

According to the analyst, it might be wise to gradually acquire Bitcoin when the Spent Output Profit Ratio (SOPR) reaches approximately 1.04, as this could potentially lead to substantial long-term profits. Additionally, keeping an eye on large Bitcoin holders’ behavior (whales) may yield profitable market timing opportunities.

BTC Price

Yesterday, Bitcoin dropped to approximately $65,000, but it’s bounced back since then and currently hovers around $67,100.

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2024-10-25 04:16