Bitcoin Still Has Room to Grow Before Reaching Cycle Tops
An analyst has pointed out that the Bitcoin Adjusted Spent Output Profit Ratio (aSOPR) has not yet reached levels seen during previous cycle tops, indicating that there may still be room for growth in the current bull cycle. The aSOPR is a key on-chain indicator that tracks whether cryptocurrency investors are selling their tokens at a profit or loss at any given moment.
- The SOPR analyzes the historical price at which each coin was transacted to determine whether it was sold for a profit or a loss.
- Values above 1 indicate that investors are selling at a profit, while values below suggest a higher prevalence of loss realization in the market.
- The aSOPR, a modified version of the SOPR, excludes transactions made within an hour of their previous transfers to provide a more accurate representation of profit-taking behavior.
Bitcoin aSOPR Trends and Analysis
Analysts have observed that the 90-day exponential moving average (EMA) of Bitcoin aSOPR has not reached levels associated with previous bull cycle tops. Despite hitting a new all-time high (ATH) earlier this year, the indicator has since cooled down, indicating a decrease in profit realization among investors.
- During the recent rally, the aSOPR peaked at 1.05 before dropping to 1.01, significantly lower than levels seen during previous bull cycles.
- Historically, bull run tops in 2017 and 2021 have coincided with aSOPR values approaching 1.1, indicating that Bitcoin may still have room to grow before reaching the peak of the current cycle.
- Similar patterns were observed during the April 2019 rally, suggesting that the recent surge in aSOPR could be a precursor to a larger bull run in the near future.
Bitcoin Price Performance
Despite facing bearish momentum in recent weeks, Bitcoin has seen a 5% rally in the past 24 hours, pushing its price above $63,000. This upward movement indicates strong market sentiment and potential for further price appreciation in the near term.
Hot Take: Bitcoin’s Path to the Bull Cycle Top
As Bitcoin continues to navigate the volatile crypto market, the aSOPR indicator provides valuable insights into investor behavior and market sentiment. With the indicator yet to reach levels associated with previous cycle tops, there is a possibility for further growth in Bitcoin’s price before reaching the peak of the current bull cycle. Investors should closely monitor aSOPR trends and market dynamics to make informed decisions in the ever-changing crypto landscape.
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