According to on-chain data, the Bitcoin SOPR is still assuming flat values, indicating that investors are not willing to sell at this level.
Despite the Huge Rise in the Price of Crypto, Bitcoin SOPR Is Stable
According to a post by Cryptoquant, while there has been a sharp correction in the price of bitcoin as the coin reaches $55k for the first time since May, SOPR is still showing a flattening line.
The Expenditure Output Profit Ratio, or SOPR for short, is a BTC indicator that shows the profit ratio of the market as a whole. It does this by looking at on-chain transactions and comparing the price at which the buy transaction took place and the price at which the same coins were sold.
When the value of this indicator is greater than 1, it means that the coins transferred in the specified time-frame are selling at an average profit.
Conversely, a SOPR value below 1 indicates that BTC was traded at an average loss over the period sold. Whereas a value of exactly one would mean sellers are still breaking out.
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Now, here is a chart showing the trend in this indicator for BTC:
Bitcoin's SOPR seems to have flattened recently | Source: CryptoQuant
When the indicator shows an increasing value, it means that investors have started to realize their profit by selling their coins.
On the other hand, the declining value would mean that holders are putting their coins at a loss, probably because they have no confidence left in crypto.
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As the above graph shows, SOPR values are neither decreasing nor increasing recently. The curve for the indicator is just a flat line right now.
This is despite bitcoin’s recent big move, where usually some investors start turning their profits, but this time it doesn’t seem to be the case.
Such a trend could be because most holders think the price of the coin will go up even more, so they are not moving around their crypto just yet.
Investors’ reluctance to sell their bitcoins could prove to be quite bullish for the cryptocurrency. However, when holders start taking their profits, there is a possibility that that’s when a correction may take place.
At the time of writing, bitcoin is priced around $53.7k, up 25% over the past seven days. Over the past thirty days, the coin has increased in value by 12%.
The chart below highlights the price movement of BTC over the past five days.
Bitcoin's big rise took it to as high as $55.5k, though since then the price has moved rather sideways | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com