Bitcoin SOPR Indicator Shows Bullish Crossover, Predicting Price Increase
A quant has indicated that Bitcoin may experience significant price increases in the coming months due to a golden cross observed in the Bitcoin Spent Output Profit Ratio (SOPR).
Bitcoin SOPR Has Just Witnessed A Bullish Crossover
According to an analyst in a CryptoQuant Quicktake post, the Bitcoin SOPR has recently shown a golden crossover. This indicator assesses whether BTC investors are selling at a profit or loss by analyzing the transaction history of each coin sold or transferred.
The SOPR compares the last sale price of coins to the current market price. If the last sale price is lower than the current price, it indicates profit realization; conversely, if it is higher, it suggests loss realization. The SOPR aggregates these profits and losses to derive a ratio.
A value greater than 1 indicates that the average holder is selling at a net profit, while a value below 1 implies more losses than profits in the market.
Below is a chart showing the trend in the 30-day and 365-day moving averages (MAs) of the Bitcoin SOPR over the past decade:
The graph indicates that the 30-day MA of the Bitcoin SOPR fell below the 365-day MA earlier this year but has recently reversed direction and surpassed it. This increase corresponds to a notable return of profit-taking following the latest rally in cryptocurrency prices.
The quant highlighted previous instances of this crossover, noting that each led to bullish price action for Bitcoin. The analyst states, “After the golden cross appears, the market usually starts a strong rise within 2 months at the latest.” This suggests Bitcoin may be poised for another upward movement.
This latest bullish crossover in the Bitcoin SOPR marks the second occurrence of this pattern in the current cycle, potentially leading to the asset's final peak.
The impact of the crossover between the monthly and yearly averages of the indicator on Bitcoin's price remains to be seen.
BTC Price
Currently, Bitcoin trades at approximately $95,000, reflecting a nearly 3% decrease over the past week.
