Bitcoin 7-Day MA aSOPR Has Sharply Gone Down Recently
As pointed out by an analyst in a CryptoQuant , the BTC market participants may be coming close to surrendering.The relevant indicator here is the “Spent Output Profit Ratio” (SOPR), which tells us whether Bitcoin investors are selling their coins at a profit or at a loss right now.
Looks like the 7-day MA value of the metric has declined in recent days | Source:As you can see in the above graph, the 7-day MA Bitcoin aSOPR has taken a deep dive below the 1 mark recently. This means that investors are now selling at some big losses. The current levels of the indicator are the same as those observed back during the 2018-19 bear market bottom, as well as during the COVID crash. The reason such deep capitulations have usually coincided with major bottoms in the price of the crypto is that they signify an exhaustion of selling pressure as the weak holders give up and dump their holdings at a loss. Stronger hands then buy these coins up and accumulate at cheap prices, leading to a more positive outcome in the long term.
If the current capitulation really is the final one, then a bottom may be in sight for Bitcoin. However, bullish trend wouldn’t immediately follow the coin; the short term outcome is likely to still be bearish.
BTC Price
At the time of writing, Bitcoin’s price floats around $16.1k, down 5% in the last week.
The value of the crypto seems to have gone down during the past day | Source:
Featured image from 愚木混株 cdd20 on Unsplash.com, charts from TradingView.com, CryptoQuant.com