Is The Bitcoin Top Already Here? This Historical Pattern Says So
2024年4月24日 - 3:00AM
NEWSBTC
A historical pattern currently forming in a Bitcoin on-chain
indicator could suggest that a top may be near for the asset, if
not already in. Bitcoin SOPR Ratio Is Forming A Historical Top
Pattern Right Now In a CryptoQuant Quicktake post, an analyst has
discussed about a pattern regarding the SOPR Ratio. The “Spent
Output Profit Ratio” (SOPR) is an indicator that tells us whether
the Bitcoin investors are selling their coins at a profit or loss
right now. Related Reading: Ethereum To See Fresh Move Soon? What
Futures Data Says When the value of this metric is greater than 1,
it means that profit-selling is dominant in the market currently.
On the other hand, the metric being under the threshold suggests
the average holder is moving coins at some net loss. In the context
of the current topic, the SOPR itself isn’t of interest; rather, it
is a different version called the SOPR Ratio. The name may be a bit
confusing as SOPR already contains a “ratio,” but the latter ratio
here corresponds to the fact that this indicator compares the SOPR
of two Bitcoin cohorts: the long-term holders (LTHs) and short-term
holders (STHs). These investor groups make up for the two main
divisions of the BTC market done based on holding time, with 155
days being the cutoff between the two. The STHs are those who
bought within the past 155 days, while the LTHs include the HODLers
carrying coins for longer than this timespan. Now, here is a chart
that shows the trend in the 7-day moving average (MA) of the
Bitcoin SOPR Ratio over the history of the cryptocurrency: The
7-day MA value of the metric seems to have turned around towards
the downside recently | Source: CryptoQuant As displayed in the
above graph, the 7-day MA Bitcoin SOPR Ratio had been heading up
throughout 2023 and early parts of 2024, but recently, the metric
has hit a top and reversed its direction. Whenever the SOPR Ratio
is higher than 1, it means the LTHs, who are generally known to be
resolute hands, are participating in a higher degree of
profit-taking than the STHs. It would appear that as BTC had
observed its rally and approached a new all-time high (ATH), these
diamond hands had started harvesting some of the gains they had
earned over their long holding time. And once the price set a new
ATH, these investors participated in peak profit-taking. Since
then, their profit-selling has been dropping off, although they are
still harvesting notably higher gains than the STHs. In the chart,
the analyst highlights how this pattern has been repeated at
different points in the asset’s history. While the scale of the
peak LTH profit-taking has been heading down over the cycles, it’s
still true that the metric’s top has coincided with tops in the
price during each of them. Related Reading: Dogecoin To $1: Analyst
Thinks Dream Milestone Could Be Hit In Coming Weeks As the line
drawn by the quant suggests, it’s possible that the latest peak in
the metric may have in fact been the top for this cycle. This is
only, however, assuming that the pattern of diminishing returns in
the indicator holds to the exact degree judged by the line. It’s
possible that the peak will still be higher than the current
levels, while at the same time being lower than the previous
cycle’s peak, thus still being in-line with the historical Bitcoin
pattern. Whatever the case be, though, the fact that the SOPR ratio
has apparently hit a top could still be a bearish signal, if only
in the short term. BTC Price Bitcoin has been making some steady
recovery over the last few days as its price has now surged back
above $66,100. Looks like the price of the asset has been going up
over the last few days | Source: BTCUSD on TradingView Featured
image from Maxim Hopman on Unsplash.com, CryptoQuant.com, chart
from TradingView.com
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