- Bitcoin’s SOPR could repeat history, allowing investors to remain profitable
- ELR expressed renewed interest in opening BTC derivative contracts
Expect a short notice Bitcoin [BTC] recovery is something many market participants may not be hoping for. A pseudonymous CryptoQuant analyst Crazyblock has meant that it is not impossible.
How many Worth 1,10,100 BTCs today?
According to the analyst, the state of the Spent Output Profit Ratio (SOPR) offers this potential. as a macro market sentiment indicator, the SOPR measures the extent of realized profits that are moved up the chain.
BTC: Providing an advantage to holders
Values above 1 on the SOPR suggest that investors are selling at a profit. On the other hand, SOPR values below 1 indicate average sales at a loss. And at the time of writing, the value of the metric was higher.
However, Crazyblockk’s argument is the lifespan that the metric has had in its current position. In fact, the datasets showed that Bitcoin’s SOPR has remained above value since March.
Source: CryptoQuant
This prompted the analyst to compare the state in 2017 and 2019 to the SOPR at the time of going to press.
Between 2015 and 2016, the SOPR consistently maintained its value above 1. Thus, this led to the price of BTC reaching $20,000 in 2017. The analyst also mentioned that the SOPR condition in 2019 was vital to the BTC All-Time High (ATH) in 2021 Crazyblock added,
“When the No. 1 of this data holds for consecutive months and the pocket value of these holders rises above this level, it is a sign of a strong interest in staying in the market and becoming profitable. The 2015 and 2019 price cycles are good examples.”
According to the analyst, there is strong interest in the market. In addition, current demand is sufficient to withstand any heavy selling pressure, the analyst added.
Big bets on which direction?
Meanwhile, BTC continued its consolidation over the past 24 hours. Despite this, the Estimated Leverage Ratio (ELR) has increased.
Usually the ELR shows how much lever used by users. And it is calculated by dividing the Open Interest (OI) by the currency reserves. Lower values of the ELR suggest that investors are cautious about the leverage used.
However, when the ELR rises, it means participants are placing big bets on their derivatives traders.
Source: CryptoQuant
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Whether long or short, the increase is also in line with the aforementioned discussion around the strong interest in the market.
Additionally, oinonen_t, another CryptoQuant analyst, noted that the collapse of liquidity in the market has not negatively affected Bitcoin’s strength. Citing rising accumulation and active addresses, the analyst stressed,
“Current selling pressure comes from market makers, who recently dumped a large number of Binance-related altcoins, causing liquidity to collapse. In contrast to the challenging market environment, bitcoin’s technical and fundamental indicators reflect its strength.”