Why This Bitcoin Bearish Divergence Could Spell Doom For BTC Rally

A quant has explained how this bearish divergence in Bitcoin on-chain data can lead to a short-term correction in the price. Bitcoin Short-Term Holder SOPR Has Been Slowing Down Despite Price Going Up As explained by an analyst in a CryptoQuant post, a gap has been forming in the purchasing power of short-term holders and the BTC price. The relevant indicator here is the “Spent Output Profit Ratio” (SOPR), which tells us whether investors in the Bitcoin market 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 overall market is realizing some amount of profit currently. On the other hand, values below the threshold suggest the average holder is seeing some loss at the moment. Naturally, the indicator at exactly equal to 1 implies the investors are just breaking-even on their investment. Related Reading: Ethereum Active Addresses At Highest Since May 2021, Good News For ETH? The “short-term holder” (STH) group is a Bitcoin cohort that includes all investors who bought their coins less than 155 days ago. The STH SOPR thus measures the profit ratio of selling being done by these holders. To properly assess the behavior of this group, the analyst is using a “rate of change” (ROC) oscillator for the indicator. Here is a chart comparing this momentum oscillator with the BTC price over the last few months: Looks like the metric has been going down in recent days | Source: CryptoQuant As the above graph shows, the ROC of the Bitcoin STH SOPR had been in deep red when the FTX crash took place, suggesting that these investors capitulated during it and realized a large amount of loss. However, as the BTC price has slowly improved from the lows, the ROC has become green. This implies that the STHs who bought during the lows have been selling for profits, leading to a rising SOPR. Bitcoin has continued to see an uptrend recently, but strangely, the STH SOPR ROC has been dropping off. This could be a sign that not many STHs were able to buy during these lows, hinting that their purchasing power is low at the moment. If they had been buying through this rally, they would have continued to harvest more and more profits as the price goes up, but that has clearly not been the case. Related Reading: Bitcoin Price Crystal Ball – What Happens To BTC After Christmas 2022? Such a divergence also formed in the relief rally seen earlier in the bear market, as the quant has marked in the chart. “Last time, this situation led to a bearish correction,” notes the analyst. “If this alignment repeats, then this time, Bitcoin may correct to the $16,500-$17,000 range.” BTC surges up | Source: BTCUSD on TradingView At the time of writing, Bitcoin’s price floats around $17,700, up 5% in the last week.

View Details

This Historic Bitcoin On-Chain Support Level Is Still Not Lost

On-chain data shows the historical 20-Day MA Bitcoin aSOPR support level has continued to hold so far. Bitcoin 20-Day MA aSOPR Rebounds Off Historical Support Line As pointed out by an analyst in a CryptoQuant post, the BTC aSOPR recently retested its 8-year old support. The “Spent Output Profit Ratio” (or SOPR in short) is an indicator that tells us whether the average Bitcoin investor is selling at a profit or at a loss right now. When the value of this metric is greater than 1, it means the overall market is moving coins at some profit currently. On the other hand, values of the indicator less than the threshold suggest holders as a whole are realizing some loss with their selling at the moment. Naturally, SOPR values exactly equal to 1 imply the investors are just breaking even on their investment right now. Related Reading: Bitcoin Could Usher In December Near $18,000 If It Moves Past This Resistance “Adjusted SOPR” (aSOPR) is a modified version of this metric that excludes from the data any selling of coins that was done within 1 hour of first acquiring said coins. Here is a chart that shows the trend in the 20-day moving average Bitcoin aSOPR over the last several years: Looks like the 20-day MA value of the metric has sharply declined in recent days | Source: CryptoQuant As you can see in the above graph, the 20-day MA aSOPR rapidly went down following the FTX crash, and touched a low of 0.93 just a week or so ago. This level was the same as the one seen during the lows of the previous bear markets, and each of the touches in those bears launched the metric back up. The support line has now been active since 2014, and in the 8 years so far the indicator has never seen any actual dip below it. Related Reading: Bitcoin Hits $17,000, But Is It Too Early To Call The All Clear On The Bear Market? Since the retest of this support level a week ago, the metric has already bounced back up, suggesting that this important support line is still holding right now. However, it’s uncertain whether this successful retest means the bottom is now in. Back In the 2018/19 bear, it was indeed the case, but in 2014/15 it took two touches of the line before the real bottom formed. BTC Price At the time of writing, Bitcoin’s price floats around $16.8k, up 3% in the last week. Over the past month, the crypto has lost 18% in value. The below chart shows the trend in the BTC price over the last five days. The value of the crypto seems to have been moving sideways since the surge | Source: BTCUSD on TradingView Featured image from André François McKenzie on Unsplash.com, charts from TradingView.com, CryptoQuant.com

View Details

Bitcoin Declines Slightly As Short-Term Holders Take Profits

After surging to as high as $20.9k, Bitcoin has today observed a slight decline back into the low $20k levels as a result of profit taking from short-term holders. Bitcoin Short-Term Holder SOPR Has Been Elevated Over The Past Two Days As pointed out by an analyst in a CryptoQuant post, the short-term holders seem to be using the latest price rise for profit taking. The relevant indicator here is the “Spent Output Profit Ratio” (SOPR), which tells us whether the average investor is selling Bitcoin at a profit or at a loss right now. When the value of this metric is greater than 1, it means the overall market is realizing some amount of profit currently. On the other hand, values below the threshold suggest the holders as a whole are selling at a loss Naturally, values of the SOPR exactly equal to one suggest that the investors are just breaking even on their selling at the moment. Related Reading: Why Crypto Market Fear Mirrors Lull In Volatility Now, there is a cohort in the Bitcoin market called the “short-term holders” (STHs), which includes all investors who have been holding their coins since less than 155 days ago. Here is a chart that shows the trend in the BTC SOPR specifically for this holder group over the last couple of weeks: The value of the metric seems to have spiked up in recent days | Source: CryptoQuant As you can see in the above graph, the Bitcoin STH SOPR has been elevated above the 1 level during the last two days or so. This rise has coincided with the BTC price finally surging up after moving sideways around $19k for a long while. This suggests that these investors are using this opportunity to harvest some profits. Related Reading: The Inverted Bitcoin Chart Bears Don’t Wanna See | BTCUSD Analysis October 27, 2022 Such profit-taking is generally bearish for the price of the crypto, and as the chart displays, there were three instances of this kind of trend during the past two weeks. All of those profit realization sprees from the STHs resulted in the price going back down after a short-term rise. This time as well the BTC price has gone down from its high of $20.9k to as low as below $20.1k. before retracing back up some to the current level. BTC Price At the time of writing, Bitcoin’s price floats around $20.5k, up 8% in the last seven days. Over the past month, the crypto has gained 7% in value. Below is a chart that shows the trend in the price of the coin over the last five days. Looks like the value of the crypto has gone down over the last couple of days | Source: BTCUSD on TradingView Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com

View Details

Bitcoin Near Crucial Retest: Which Of These Historical Patterns Will Repeat?

On-chain data shows a Bitcoin indicator is near a crucial retest currently that may decide where the cryptocurrency will go next from here. Which Pattern Will Bitcoin Follow Next: 2016 Or 2019? As pointed out by an analyst in a CryptoQuant post, the BTC SOPR for short-term holders is approaching the baseline. The “Spent Output Profit Ratio” (SOPR) is an indicator that tells us whether Bitcoin investors are selling/moving their coins at a profit or at a loss right now. When the value of this metric is greater than 1, it means that the average holder in the market is realizing some amount of profit with their selling currently. On the other hand, values below this threshold suggest loss taking is the dominant force in the market at the moment. Naturally, the SOPR being exactly equal to the 1 baseline implies the total amount of profits being realized are exactly canceling out the amount of losses as the market as a whole is neutral. This SOPR is for the entire Bitcoin market, but in the context of the current discussion, the relevant version of the metric is the one for just a single segment of the market: the “short-term holders” (STHs). The STH group includes all the investors who purchased their coins less than 155 days ago. This cohort generally includes the weak hands of the market, who may easily react to fluctuations in the market. Now, here is a chart that shows the trend in the 90-day and 365-day moving averages (MAs) of the Bitcoin STH SOPR over the last few years: Looks like both the metrics have been above the baseline in recent days: Source: CryptoQuant As displayed in the above graph, the 90-day MA of the Bitcoin STH SOPR (colored in yellow) broke out above the 1 baseline back when this rally first started around the beginning of the year. This breakout suggested a shift towards profit selling for these investors, something that has historically been observed in all previous major rallies in the cryptocurrency. With the latest leg in the Bitcoin rally above the $30,000 mark, the 365-day MA of the indicator (highlighted in blue) has also managed to climb up above this mark. Related Reading: Bitcoin Exchange Inflow Spikes, Is This Bearish? While this has been happening, though, the 90-day MA has actually been heading down and is now about to cross below the 365-day MA as it approaches the 1 baseline. In the chart, the quant has marked the two previous instances where a trend similar to this had formed for the asset. It looks like back in 2016 when the 90-day MA had retested the 1 mark after a similar structure had taken shape, the metric had found support at the break-even mark. This rebound kept Bitcoin going and the coin eventually built up into a bull market. In 2019, though, the retest of the 90-day MA STH SOPR failed and a bearish trend once again took over the coin. It wouldn’t be until 160 days later that bullish sentiment returned and the rally happened. Related Reading: Bitcoin Has Broken This Open Interest Pattern, Quant Explains As the current Bitcoin market looks to be in a similar spot as these two historical occurrences, it’s possible that it may follow the lead of one of these. It now remains to be seen, as to which of these patterns the asset might exhibit this time. BTC Price At the time of writing, Bitcoin is trading around $30,300, down 1% in the last week. BTC has surged during the past day | Source: BTCUSD on TradingView Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, CryptoQuant.com

View Details

Sideways SOPR: A prelude to Bitcoin’s next big move?

Bitcoin’s price has been a study in tranquility since it broke through the $30,000 level, setting a tight trading range between $30,000 and $31,000 for most of July. This period of low volatility has left many traders and analysts uncertain about future price movements. However, on-chain data, specifically the Spent Output Profit Ratio (SOPR), may […]

The post Sideways SOPR: A prelude to Bitcoin’s next big move? appeared first on CryptoSlate.

View Details

This Bitcoin Metric Is At A Crucial Junction, Will Bulls Find Victory?

On-chain data shows a Bitcoin indicator is currently retesting a crucial level that could decide the direction the market takes from here. Bitcoin Short-Term Holder SOPR Has Plunged To A Value Of 1 As pointed out by an analyst in a CryptoQuant post, the short-term holders are currently selling at their break-even mark. The relevant indicator here is the “Spent Output Profit Ratio” (SOPR), which tells us whether Bitcoin investors are moving 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 in the market is currently selling their coins at a profit. On the other hand, the indicator having values below this threshold suggests the market as a whole is realizing a net amount of loss. The level at which SOPR becomes exactly equal to one implies that the loss realization is exactly equal to the profit realization right now, and hence, the average investor is just breaking even on their investment. In the context of the current topic, the entire market isn’t of interest; only a segment of it: the “short-term holders” (STHs). The STHs include all BTC investors that bought their coins within the last 155 days. Now, here is a chart that shows the trend in the 14-day moving average (MA) Bitcoin SOPR specifically for these STHs over the last few years: The value of the metric seems to have been going down in recent days | Source: CryptoQuant Historically, the Bitcoin STH SOPR has followed a curious pattern. During bullish periods, the indicator has generally stayed above the line where the metric’s value becomes 1. This makes sense, as rallies allow the STHs many profit-taking opportunities, so the majority should be selling at some gains. Related Reading: PEPE Unlikely To Be As Big As DOGE & SHIB, Says Santiment What’s actually interesting, though, is that whenever the metric has dropped to the 1 line, it has provided support to the price (and has also made the indicator rebound back above it). Examples of this have been marked with the green arrows in the graph. As already mentioned before, the 1 line signifies the level where the average STH is just breaking even, meaning that they are selling at the price at which they acquired their coins, that is, their cost basis. The reason why this level acts as support during bullish trends is that the investors see their cost basis as a profitable buying opportunity (since they believe the price would go up in the near future). So, a large amount of buying takes place here. Related Reading: Aura Around PEPE Isn’t Good For The Market, Especially Bitcoin – Here’s Why In bear markets, the opposite behavior is seen; the level acts as resistance to the price since selling tends to happen at it. Because of this pattern, the indicator’s behavior about the 1 level can provide hints about whether a bullish or a bearish regime is active currently. Recently, the indicator has once again dipped to this crucial level. If the Bitcoin rally is still on right now, then the Bitcoin STH SOPR should observe a rebound here. This has already happened once during this rally, as the price felt support at this level back in March. If, however, the retest ends up failing, then it may mean that a transition back to a bearish period may have occurred for the cryptocurrency. BTC Price At the time of writing, Bitcoin is trading around $27,000, down 2% in the last week. Looks like BTC has been moving sideways recently | Source: BTCUSD on TradingView Featured image from iStock.com, charts from TradingView.com, CryptoQuant.com

View Details

Strong Bitcoin Rise Expected Within 1-2 Months, Quant Explains Why

A quant has explained how Bitcoin may be expected to see a strong rise in the coming months based on a golden cross that has occurred in this indicator. Bitcoin SOPR Has Just Witnessed A Bullish Crossover As an analyst in a CryptoQuant Quicktake post pointed out, the Bitcoin Spent Output Profit Ratio (SOPR) has shown a [...]

The post Strong Bitcoin Rise Expected Within 1-2 Months, Quant Explains Why appeared first on Crypto Breaking News.

View Details

Bitcoins Key SOPR Metric Holds Steady: Are Long-Term Holders Eyeing Higher Prices?

Bitcoin has continued to see declining performance in recent days with on-chain metrics offering valuable insights into market behavior. Among these metrics, the Spent Output Profit Ratio (SOPR) for long-term holders has particularly emerged as a critical tool for assessing investor sentiment and market resilience. Long-term holders, defined as investors holding Bitcoin for over 155 [...]

The post Bitcoins Key SOPR Metric Holds Steady: Are Long-Term Holders Eyeing Higher Prices? appeared first on Crypto Breaking News.

View Details

Is Too Late To Accumulate Bitcoin? What This Indicator Says

Here’s what the historical pattern of an on-chain indicator suggests regarding whether the time to accumulate Bitcoin is over or not. Bitcoin 150-Day MA aSOPR Currently Has A Value Of 1.01 As pointed out by an analyst in a CryptoQuant Quicktake post, the 150-day moving average (MA) of the Bitcoin aSOPR has a value of [...]

The post Is Too Late To Accumulate Bitcoin? What This Indicator Says appeared first on Crypto Breaking News.

View Details

Bitcoin Plunge Under $28,000 Only Temporary? This Metric Suggests So

Bitcoin has now plunged under the $28,000 level, but the data of an on-chain indicator may suggest that this drop could only be temporary. Bitcoin Short-Term Holder SOPR Has Dropped Just Under The 1 Level As pointed out by an analyst in a CryptoQuant post, the current values of the metric have generally served as ideal buying opportunities during rallies in the past. The relevant indicator here is the “Spent Output Profit Ratio,” which tells us whether the average Bitcoin investor is selling their coins at a profit or at a loss right now. When this indicator has a value greater than 1, it means the profits being realized in the market are currently greater than the losses. On the other hand, values below this threshold suggest a dominance of loss-taking from the holders. The SOPR being exactly equal to 1 naturally corresponds to a neutral state, where the average holder is just breaking even on their investment, as profits are equal to losses here. While the SOPR is generally defined for the entire Bitcoin market, it can also be applied to specific segments of the market. In the context of the current discussion, the “short-term holder” (STH) segment is of interest. Related Reading: Bitcoin To Drop Further? Whales Show Signs Of Dumping The STHs make up a cohort that includes all investors who have been holding onto their coins since less than 155 days ago. The STHs who manage to hold beyond this threshold enter into the “long-term holder” (LTH) group. Now, here is a chart that shows the trend in the Bitcoin STH SOPR over the last few years: The value of the metric seems to have seen some decline recently | Source: CryptoQuant As displayed in the above graph, the Bitcoin STH SOPR was below the 1 mark during last year’s bear market, suggesting that the average STH had been selling at a loss in this period. This is the typical behavior observed in bearish periods, as the constant price decline makes investors panic and sell at losses. An interesting pattern that is seen during such periods is that the line where SOPR attains a value of 1 starts providing resistance to the asset. The reason this happens is that at this level, the STHs are selling at the price they bought in. During bear markets, they usually go into losses, so whenever they find the opportunity to sell to recoup their original investment, they jump right on it. This is why the level provides resistance and forces the indicator to stay under it. Related Reading: Bitcoin Bull Run In Jeopardy As Parabolic SAR Flips Bearish On Daily Chart The opposite behavior is seen in price rallies, however, as holders start looking at the break-even level as a profitable entry point, which leads to a large amount of buying taking place at the level. This assures that the indicator quickly returns above the 1 level if it falls below it. From the chart, it’s visible that the rally this year has also seen a similar trend so far, as the Bitcoin STH SOPR has maintained above 1 (besides a temporary drop in March, which ended up resulting in a sharp surge in the price). In the last few days, the indicator has again plunged to this level of much historical significance as the price has slipped under $28,000. If the past pattern is anything to go by, a rebound could become more probable for the BTC price here. BTC Price At the time of writing, Bitcoin is trading around $27,600, down 1% in the last week. Looks like BTC has sharply dropped in value during the last few days | Source: BTCUSD on TradingView.com Featured image from iStock.com, charts from TradingView.com, CryptoQuant.com

View Details

Bitcoin SOPR Plunges, Why This Could Be Bullish

On-chain data shows the Bitcoin Spent Output Profit Ratio (SOPR) has plunged recently; here’s why this may be bullish for the price. Bitcoin SOPR Observed A Deep Plunge In Recent Days As an analyst in a CryptoQuant post pointed out, many investors have sold at a loss recently. The “SOPR” is an indicator that tells [...]

The post Bitcoin SOPR Plunges, Why This Could Be Bullish appeared first on Crypto Breaking News.

View Details