Bitcoin (BTC) hodlers hoping to get back on the bull run may not have to wait longas a popular indicator gives cause for optimism.
As compiled by the on-chain monitoring resource Glassnode, Bitcoin Spent Production Profit Index (SOPR) data suggests that the current BTC price correction is almost complete.
The BTC price correction should end “soon”.
The SOPR captures the percentage of currencies that move in order to be profitable, this means, whether sellers make a profit or a loss.
When the ad is up 1 and falls, reflects sellers who divorce their holdings with different profit margins. As soon as 1 is reached, “Reset” the SOPR, Sellers have sold everything they can, Reducing downward pressure on prices and theoretically allows Bitcoin to rise again.
The SOPR has shown its strength in various phases of past bull cyclesThe readjustment phenomenon was particularly successful when it hit lows in 2020.
Now, with a decreasing trend approaching the magic value of 1Market participants expect last week’s sell-off to be the end, not the beginning, of poor performance.
“If we are in a bull market now, according to SOPR, the correction is not yet complete but will end soon.”, wrote on Tuesday the popular Twitter account, CryptoHamsterLoad an annotated Glassnode diagram.
Tickets speak for themselves
If the SOPR repeats its historical pattern, may appeal to some investors who have seen significant volatility so far this year.
While commentators argue that under no circumstances could Bitcoin have continued its vertical gains for an extended period of time, The cold has characterized the responses to Bitcoin’s correction from $ 42,000 to less than $ 30,000.
Amid a sea of explanations for the sudden fall Proponents highlight institutional engagement as an antidote to retailer panic and criticism from the financial sector and mainstream news. Grayscale, for example, shopped again after the holidays and regularly added many times the amount of BTC that was mined in the same period.
“Last week, $ 1.31 billion went into bitcoin and crypto investment products (a new record) when investors bought the drop.”, summarized Businessman Alistair Milne on Twitter Tuesday.
He added that 97% of this new capital went specifically into Bitcoin.
Disclaimer: Some quotes from this article from previously published sources have been slightly edited.