Bitcoin aSOPR Profit-Loss Junction Continues To Act As Resistance
23 September 2022 - 09:00PM
NEWSBTC
On-chain data shows the Bitcoin aSOPR profit-loss junction has
continued to act as resistance to the price of the crypto. Bitcoin
aSOPR Bounces Back Down From The Breakeven Line As pointed out by
an analyst in a CryptoQuant post, the aSOPR value equal to ‘1’ line
has been acting as resistance for around 185 days now. The “Spent
Output Profit Ratio” (or SOPR in short) is an indicator that tells
us whether the average Bitcoin investor is selling at a profit or
at a loss right now. When the value of this metric is greater than
1, it means the holders as a whole are moving their coins at some
profit currently. On the other hand, the indicator’s value being
lesser than the mark implies the overall market is realizing loss
at the moment. Naturally, SOPR values exactly equal to 1 signify
that the average holder is just breaking even on their investment.
Related Reading: Will October Bring Fearfulness To Crypto For 200
Straight Days? A modified version of the metric is the “Adjusted
SOPR” (aSOPR), which excludes from the data the transactions of all
those coins that moved again within only an hour of their last
transfer. Now, here is a chart that shows the trend in the Bitcoin
aSOPR over the last couple of years: The value of the metric seems
to have been in the loss region for a while now | Source:
CryptoQuant As you can see in the above graph, the quant from the
post has marked the relevant zones of trend for the Bitcoin aSOPR.
During historical bear periods, the indicator has always found
sharp resistance at the junction between the profit and loss
regions, and has thus remained locked below the 1 level. In the
current bear market as well, the metric has been staying at values
less than one. It has made several attempts to break into the
profit zone, but so far it has been rejected back down each time.
Related Reading: TA: Bitcoin Price Remains Range bound, Why There’s
Hope of a Fresh Rally The reason behind this is that the aSOPR
reaching a value of 1 suggests investors, who were previously in
loss, are now selling at the same price they got in.
Psychologically, this appears to these holders as gaining their
money “back.” Hence, a large amount of investors usually dump at
this point, providing resistance to the price. In the past, proper
breaks above the profit-loss junction have meant the start of a new
bull rally. Since the Bitcoin aSOPR is still trapped in the loss
zone, it’s safe to assume the market is yet to see through this
bear. BTC Price At the time of writing, Bitcoin’s price floats
around $18.8k, down 5% in the past week. BTC has been moving
sideways | Source: BTCUSD on TradingView Featured image from Marco
Pagano on Unsplash.com, charts from TradingView.com,
CryptoQuant.com
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