- The increase in realized losses on-chain indicates that another BTC rally was close.
- Historical data presented by the cycle detector shows that the coin is not in a bear phase.
If the current cycle is still in a bull phase, then Bitcoin [BTC] is close to the bottom. This was the indication AMBCrypto got after looking at the Short Term Holder (STH) SOPR.
SOPR stands for Spent Output Profit Ratio. This indicator gives insights in the realized profits of all coins traded on the chain. But this time the focus is on the short term.
Are Losses Big for Bitcoin’s Price?
If the STH-SOPR is greater than 1, it means that the price at the time BTC was sold is greater than the purchase value. This indicates many realized profits in the chain.
However, when the statistic is less than 1, it means that the sold prices are higher than the weighted purchase value. This indicates realized losses in the chain. According to CryptoQuant, Bitcoin’s STH-SOPR had fallen to 0.98.
Source: CryptoQuant
Historically, when this happens, it means Bitcoin has hit the bottom or is close to it. As shown in the image above, it was a similar event in September 2023.
Around that time, the price of Bitcoin was $26,253. The SOPR had also fallen to a similar region. By November of the same year, the coin had reached $35,441.
Other bull cycles such as 2021 and 2018 also show a similar trend, indicating that the pattern often rhymes. Should this be the same case, the price of Bitcoin could increase by 34.99% in less than two months.
At the time of writing, the price of BTC was $57,154. Based on this calculation, the price of the coin could trade around $77,100 in September.
Should this materialize, it means BTC could hit a new all-time high this quarter.
However, regardless of the positive outlook, it is important to check whether the cycle is still in a bull phase.
Bears, it’s not your time yet!
Earlier, when Bitcoin fell to $54,274, there were calls for a return to the bear market. But opinions don’t confirm these things. That was why AMBCrypto looked to Glassnode for first-hand information on the situation.
To do this, we looked into the Bitcoin Cycle Change Detector. This detector sees transitions from a bull market to a bear market. It also indicates whether a bear market has turned into a bull market.
If the market turns into a bear market, the color on the chart turns red. This was evident from the market conditions of November 2022. But at the time of writing this was not the case.
Source: Glassnode
Unless the total Bitcoin in circulation returns close to 100% in gains, the transition to a bear cycle would not occur. Since this was the case, it is possible that BTC has hit the bottom.
Read Bitcoin’s [BTC] Price forecast 2024-2025
Therefore, the coin could reach a much higher value before the end of the quarter – possibly between $76,000 and a very bullish price above $80,000.
However, this prediction would be debunked if selling pressure were to hit the market, as has been the case in recent weeks.