The Bitcoin [BTC] the adjusted SOPR was above 1 for nine consecutive days in May, AMBCrypto reported. This metric measures whether the coins moved on the chain make an average profit or loss. Scores above 1 indicate realized gains for holders.
Bitcoin continued to trade above the psychological barrier of $80,000 as stronger holders absorbed selling from profit-taking. Ultimately, this absorption may dry up, resulting in a price correction.
Historical trends warn of a steep BTC correction
In a post on X, Crypto Super Hub co-founder Jake Pahor warned that the CSH score was above 40. This metric serves as a trend oscillator and is limited to a score from 0 to 100. It uses the long-term growth trend of an asset to determine whether it is in an accumulation zone (scores below 30) or in overextended market conditions (scores above 60).
The current reading of 41 is the third bear market rally in Bitcoin history to reach this zone. All three times, BTC witnessed a sharp correction.
The analyst emphasized that three is a small sample size, but it was something to keep an eye on. If historical patterns repeat themselves, investors and holders could be rewarded for taking profits and staying on the sidelines.
Although the spot taker CVD was dominated by buyers and the SOPR indicated holders’ profitability, the current rally has been characterized more by reduced selling than by active, sustained demand that rivaled previous phases of the bull market.
Government bonds and funds can publicly say they are buying, but…
In a post on When the 30-day reserves move into positive zones, it indicates that more BTC is entering the centralized exchanges than is staying within that window.
Although institutional holders continued to add to their BTC funds, the on-chain data showed a bearish picture. The analyst wrote that “it would be very strange” if the price of the leading crypto continued to rise as reserves increased.
Final summary
- Bitcoin holders’ profitability posed a risk to the continued price increase.
- Rising foreign exchange reserves and historic bear market rally patterns were warning signs for investors.