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This On-Chain Indicator Suggests Bitcoin Still Only 1/3rd Into Bear Market

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A long-term SOPR bitcoin holder might assume that the cryptocurrency has only gone one-third of the way through the last bear market.

Bitcoin 20-Day Long-Term SMA SOPR Holder Just 86 Days Down Zone

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As a CryptoQuant analyst points out mailthe cryptocurrency is still only 1/3 of the way to the average historical bottom period of 260 days.

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The relevant indicator here is the Profit Spent Ratio (or SOPR for short), which tells us whether the average bitcoin investor is selling at a profit or at a loss right now.

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The metric works by looking at the history of each coin sold on the network to see what price it was last sold at. If this previous sale price was less than the last BTC value, then the coin has just been sold at a profit. And if the last value was greater than the current value, then this particular coin suffered some loss.

When the SOPR value is greater than one, it means that the market as a whole is currently selling at a profit.

On the other hand, a value less than one means that the average holder is currently trading coins at a loss.

“Long Term Holders” (LTH) is a Bitcoin cohort that includes all investors who hold their coins for at least 155 days without selling or moving them.

Now here is a chart showing SOPR BTC (20-day MA) specifically for these LTH over the past few years:

SOPR Long Term Bitcoin Holder

Looks like the value of the metric has been pretty low recently | Source: CryptoQuant

As you can see in the chart above, Bitcoin’s LTH SOPR (20-day SMA) dropped below the one mark some time ago.

Also on the chart, the quantum marked all the actual trend zones for the indicator in relation to the bear market.

It seems that historical bottoms have continued whenever the metric has stuck below the breakeven point.

On average, past bear markets have lasted about 260 days based on LTH SOPR. In the current cycle, the coin has been in the bottom zone for 86 days.

This suggests that if bitcoin ends this bear market around the same time as the average, then the cryptocurrency is still only one third of the way through.

Bitcoin Price

At the time of writing, the price of Bitcoin is hovering around $23k, down 2% over the past week. Over the past month, the coin has added 13% in price.

bitcoin price chart

The value of the crypto seems to have been moving sideways during the last few days | Source: BTCUSD on TradingView
Featured image from mana5280 on Unsplash.com, charts from TradingView.com, CryptoQuant.com



Credit : www.newsbtc.com

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