Key Points:
- Onchain data indicates Bitcoin's Spent Output Profit Ratio (SOPR) is at 0.987 as of Friday.
- Historically, this pattern has often led to price recoveries, suggesting it may be a good time to buy.
Economic data and profit-taking have impacted the Bitcoin (BTC) rally, yet indicators show that purchasing at current price levels could yield benefits for investors entering the BTC market. Onchain data shows that the SOPR has reached 0.987, suggesting that investors holding Bitcoin for less than six months may be selling at a loss.
Other cycle indicators, such as Market Value to Realized Value and the Puell Multiple, along with a short-term investor ratio of 60%, indicate that the market has not peaked. This week's corrections do not seem to mark the end of the bullish trend, as noted by CryptoQuant analyst Mac_D.
“As short-term investors experience more pain, it often presents better opportunities for accumulation,” expressed MAC_D in a Thursday post. “If there are further declines from the current price, shrewd investors will likely acquire the coins sold at low prices by short-term holders. Thus, selling at this juncture might be a poorly timed decision.”
The SOPR measures profits or losses from spent Bitcoin outputs by assessing the value of coins at their last movement relative to their spent value. A short-term SOPR value below 1 may indicate capitulation or market bottoms, signaling favorable buying times.
Meanwhile, the MVRV compares Bitcoin’s total market capitalization with its realized cap, providing insights on whether Bitcoin appears overbought or oversold, which helps in forecasting market tops or bottoms.
As BTC approaches $95,000 during European morning hours after a drop to approximately $90,000 on Thursday—down 10% from a peak weekly high exceeding $120,000—traders are awaiting the upcoming release of U.S. non-farm payrolls (NFP) for more market positioning. Strong NFP outcomes could imply a robust economy, foreseeing potential interest rate hikes, which may negatively affect risk assets like Bitcoin.
