The Bitcoin price movement over the past few days after the halving has left many investors in default. Special, price details shows that the crypto did not rise above $65,000 last week. At the time of writing, Bitcoin is trading at $62,105, down 2.96% and 6.14% in the past 24 hours and seven days, respectively.
According to a CryptoQuant analyst, Bitcoin’s Adjusted Spent Output Profit Ratio (aSOPR) still looks bullish, which could be a weak signal that the crypto’s price is reversing into bullish momentum.
Current State of Bitcoin
As it stands now, Bitcoin’s price may be on its way to registering a new monthly low risk of further downside consequences less than $62,000. a recent analysis Over the weekend, Phi Deltalytics, an analyst at CryptoQuant, noted that Bitcoin’s price trajectory is showing near-term indecision. His analysis is based on the SOPR ratio, one of the lesser known but very useful metrics for analyzing Bitcoin.
SOPR measures the profit rate of output issued, which are groups of transactions that represent the movement of coins. Phi’s analysis revealed an interesting indecision regarding this metric. By this metric, Bitcoin’s Spent Output Profit Ratio (SOPR) has entered a zone of indecision in the short term, which correlates with current market sentiment. However, the analyst also noted that the adjusted SOPR continues to move in a bullish direction, a confluence that warrants careful planning when entering the market.
What does this mean for Bitcoin?
This discrepancy with the SOPR and its adjusted ratio means that many short-term holders of Bitcoin are now trading Bitcoin at a loss. Interesting enough, another CryptoQuant analysis seems to support this idea. Specifically, the ratio of long-term SOPR to short-term SOPR moves in favor of long-term holders, indicating that long-term holders realize larger profits as opposed to short-term holders. So there is continued bullish momentum with the adjusted SOPR.
A better interpretation of this SOPR ratio is that Bitcoin’s price has not been favorable to short-term holders under current market conditions. Furthermore, this suggests that the stagnation in upward momentum can be attributed to some long-term holders cashing out of their holdings.
According to Phi Deltalytics, a reversal of the adjusted SOPR into a bearish signal would ultimately imply the possibility of a rapid downward shift in Bitcoin’s price.
“The persistence of a bullish aSOPR amid wavering near-term SOPR trends raises the possibility of a rapid downward shift once the aSOPR trajectory reverses,” the analyst said.
When does the correction end?
Bitcoin’s price has fluctuated between $60,000 and $70,000 since hitting a new all-time high. The long-awaited break above $74,000 now seems like it will take forever, and this lackluster action has led some analysts to believe that Bitcoin may Reaches its peak in the current market cycle.
However, time can only reveal the crypto’s price trajectory in the coming months, especially with the recent conclusion of another halving event. If halving history repeats itself, Bitcoin could do just that continues its price increase within the next nine months.
BTC price struggles to hold $62,000 support | Source: BTCUSD on Tradingview.com
Featured image of Barron’s, chart from Tradingview.com
Disclaimer: The article is for educational purposes only. It does not represent NewsBTC’s views on buying, selling or holding investments and of course investing involves risks. You are advised to conduct your own research before making any investment decisions. Use the information on this website entirely at your own risk.
