#asopr

Bitcoin has been in freefall recently, but this popular indicator is yet to reach the same highs as the last two cycles. Is the real top still ahead for the asset? Bitcoin aSOPR Has Been Consolidating For The Last Two Years As pointed out by an analyst in a CryptoQuant Quicktake post, the Bitcoin aSOPR has been consolidating between converging trendlines for nearly two years. The Spent Output…

Profit realization on the rise: aSOPR holds steady above 1.0 since March’s SVB collapse

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Quick Take

The Spent Output Profit Ratio (SOPR) is computed by dividing the realized value (in USD) divided by the value at creation (USD) of a spent output — or simply: price sold / price paid.

Adjusted SOPR is SOPR ignoring all outputs with a lifespan of less than 1 hour.

aSOPR has been holding above 1.0 since the SVB collapse back in March. This signifies that the market is now, on average, realizing profits in on-chain spending.

This generally aligns with a healthier inflow of demand (to absorb profit-taking) and a more constructive opinion of the asset.

We tested 1.0 at the end of March, and I expect to test it a few more times — similar to previous bear markets. We can undershot 1.0 to flush out leverage, similar to 2019.

While both long and short-term holders realized profits for the first time since May 2022, this was in a downtrend in price. So we are in a similar period to early 2020 regarding price ascending.

SOPR: (Source: Glassnode)

aSOPR: (Source: Glassnode)

The post Profit realization on the rise: aSOPR holds steady above 1.0 since March’s SVB collapse appeared first on CryptoSlate.

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Bitcoin Market At Decision Point: aSOPR Retests Crucial Level

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The Bitcoin market may be close to a decision point as on-chain data shows the Adjusted Spent Output Profit Ratio (aSOPR) is retesting the 1.0 level.

Bitcoin aSOPR Has Declined Towards A Value Of 1.0 Recently

According to the latest weekly report from Glassnode, the BTC market had shifted towards a profit-dominated regime back in January. The “aSOPR” is an indicator that tells us whether the average investor is selling their Bitcoin at a profit or at a loss currently.

The “adjusted” in aSOPR comes from the fact that this metric has been adjusted for filtering out transactions/sales of all coins that were done within only one hour of the previous transaction/purchase. The benefit of making this restriction is that it removes all noise from the data that wouldn’t have had any noticeable implications for the market.

When the value of this indicator is greater than 1.0, it means the total amount of profits being harvested by the investors is more than the losses right now. On the other hand, values of the metric below the threshold suggest the market as a whole is realizing some losses at the moment.

The 1.0 level itself naturally serves as the break-even mark, where the total amount of profits becomes equal to the losses.

Now, here is a chart that shows the trend in the Bitcoin aSOPR over the last few months:

The value of the metric seems to have been above the 1.0 mark in recent days | Source: Glassnode's The Week Onchain - Week 17, 2023

Historically, the aSOPR 1.0 level has been quite important for Bitcoin, as it has represented the mark where the transition between bullish and bearish trends has taken place.

During bear markets, the indicator generally stays under this level, as investors naturally realize large losses. The mark acts as resistance in such market conditions, meaning that any attempts to break above it usually end up in failure.

On the contrary, the 1.0 level acts as a support for the price during bullish periods, making sure that the indicator stays in the profits zone. Both these patterns can also be seen in action in the above graph, as the 2022 bear market saw the metric being stuck in the zone below 1.0, while the rally that started in January has observed it is in the green area.

There was an exception last month, however, when the Bitcoin aSOPR sharply plunged below the 1.0 mark due to a sharp plunge in the price. It wasn’t long, though, before the metric (and also the price) returned back toward the bullish trend, implying that it was only a temporary anomaly.

Recently, as the asset’s price has once again been going down, the indicator has also declined toward the 1.0 level. “With aSOPR currently retesting the break-even level of 1.0, this puts the market close to a decision point,” explains Glassnode.

It now remains to be seen whether the retest will be successful, and this level will act as support for the price, or if a break below will take place, possibly bringing with it more decline for the cryptocurrency.

BTC Price

At the time of writing, Bitcoin is trading around $27,300, down 10% in the last week.

BTC has seen some sharp decline recently | Source: BTCUSD on TradingView

Featured image from Maxim Hopman on Unsplash.com, charts from TradingView.com, Glassnode.com

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Bitcoin aSOPR Retests Bear-Bull Junction, End Of Resistance?

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Data shows the Bitcoin Adjusted Spent Output Profit Ratio (aSOPR) is retesting the historical bull-bear junction. Will a break be found this time?

Bitcoin aSOPR Is Currently Doing Another Rest Of 1.0 Level

As per the latest weekly report from Glassnode, a successful retest here could suggest a meaningful regime shift in the BTC market. The “Spent Output Profit Ratio” (SOPR) is an indicator that tells us whether Bitcoin investors are selling their coins at a profit or at a loss right now.

When the value of this metric is greater than 1, it means the average holder in the market is moving coins at some profit currently. On the other hand, values below the threshold imply the overall market is realizing some loss at the moment. The SOPR being exactly equal to 1 naturally suggests that investors are just breaking even on their selling right now.

A modified version of this indicator is the “Adjusted SOPR” (aSOPR), which filters out all selling of coins that was done within only an hour of said coins being first acquired. The main advantage of this modification is that it removes noise from the data that wouldn’t have any noticeable impacts on the market anyways.

Now, here is a chart that shows the trend in the 7-day exponential moving average (EMA) Bitcoin aSOPR over the last couple of years:

The 7-day EMA value of the metric seems to have gone up in recent days | Source: Glassnode's The Week Onchain - Week 3, 2023

As shown in the above graph, the 7-day EMA Bitcoin aSOPR has sharply risen recently and has reached the 1 level for the first time since the pre-FTX crash. This level has been historically significant for BTC, as the crypto has often encountered resistance at it during bear market periods.

The reason behind this is the fact that the aSOPR equal to 1 line represents the break-even mark. Whenever the metric increases to this mark, it means enough holders are back in a state of neutrality that they are able to recoup their investment.

Psychologically, investors see this as getting their previously lost money “back” and hence large-scale dumping takes place here, thus providing impedance to the crypto’s price.

A successful break above this level would suggest, however, that there is enough demand in the Bitcoin market right now that holders are able to realize their profits and buyers are present to absorb this selling. Because of this, such breaks have usually led to a transition from bear to bull markets.

When bull markets take hold, the effect of the aSOPR 1 level flips, and the line instead starts providing support to the price of BTC.

BTC Price

At the time of writing, Bitcoin is trading around $21,200, up 23% in the last week.

Looks like the rally has come to a halt since hitting the $21,000 level | Source: BTCUSD on TradingView

Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Glassnode.com

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Is The Bitcoin Bottom In? Here's What aSOPR Metric Suggests

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A quant has explained using past trends of the Bitcoin adjusted Spent Output Profit Ratio (aSOPR) whether the current cycle has yet met all the bottom conditions.

Bitcoin aSOPR EMAs Are Approaching Golden Cross

As an analyst in a CryptoQuant post explained, the aSOPR EMAs are looking to form a golden cross soon. The “Spent Output Profit Ratio” (SOPR) indicates whether the average Bitcoin investor is selling at a profit or at a loss right now.

The “Adjusted SOPR” (aSOPR) is a modified version of this metric that excludes from the data all selling done within an hour of first purchasing the coins. The advantage of doing this is that such short-term transactions are noise in the data and, thus, don’t have any significant implications on the market.

When the value of this indicator is greater than 1, it means the holders are selling coins at some profit right now. On the other hand, values below the threshold suggest the overall market realizes some loss at the moment.

Naturally, the aSOPR being exactly equal to 1 implies that the investors are just breaking even on their current selling. Now, here is a chart that shows the trend in the Bitcoin aSOPR, as well as its 50-day and 100-day exponential moving averages (EMAs) during the 2014-2015 and 2018-2019 bear markets:

The trends in the metric during the previous bear market bottoms | Source: CryptoQuant

As shown in the above graph, the quant marked the relevant zones for the indicator in the previous two cycles. It looks like the aSOPR hit bottom values below one and then caught an overall uptrend as the price of Bitcoin itself bottomed out in both cycles. The indicator hitting low levels under one like this suggests that the investors heavily capitulated then, which detoxed the market from weak hands and hence helped the price finally bottom out.

Also, in both these bear markets, the 100-day EMA declined to the same lowest level (as represented by the lower dotted line in the chart) and rebounded back from it as this bottoming process took place. It also seems like a return to a bullish trend started with a golden cross of the two EMAs, with the 50-day crossing back above the 100-day.

Now, here is a chart that displays how the aSOPR and its EMAs are looking in the current cycle so far:

The value of the metric seems to have been climbing recently | Source: CryptoQuant

The chart shows that the same pattern of the Bitcoin aSOPR forming a bottom and then catching an overall uptrend has already appeared for the current cycle. The two EMAs are also looking on track to complete the golden cross soon.

However, the analyst has pointed out that the 100-day EMA is yet to touch the dotted level in this cycle. The period spent so far in the recovery of the metric (the uptrend from the bottom) has also been only about half of what previous cycles saw (the yellow bars).

Based on this, the quant believes there could still be one more drop in the price left, before these conditions are fulfilled and the real bottom is in.

BTC Price

At the time of writing, Bitcoin is trading around $17,200, up 3% in the last week.

Looks like BTC has sharply surged | Source: BTCUSD on TradingView

Featured image from Dmitry Demidko on Unsplash.com, charts from TradingView.com, CryptoQuant.com

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Bitcoin flashes another bottom signal as aSOPR hits lowest since 2018

The  Adjusted Spent Output Profit Ratio (aSOPR), a metric that indicates whether holders are selling at a profit or loss, recorded a downward trajectory below the 1-level, which suggests investors are selling their positions at massive losses.  According to CryptoSlate analysis, the aSOPR provided by Glassnode usually signals the transition to a bull market when investors realize high losses…