In an article on CryptoQuant Quicktake, an analyst pointed out that the adjusted Spent Output Profit Ratio (aSOPR) of Bitcoin has not reached the heights seen before the bull market cycle.
“SOPR” is a widely used on-chain indicator that shows whether investors are selling their holdings of cryptocurrencies at a profit or loss. This indicator looks at the blockchain history of each transaction token to determine its previous trading price. If a token is sold at a price higher than its last transaction price, profit is generated. Conversely, selling at a lower price indicates a loss.
SOPR also shows the balance between gains and losses in the network. A value greater than 1 implies that investors are generally selling at a profit, while a value lower than 1 indicates more investors are selling at a loss.
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For the current analysis, the focus is on the adjusted version of this indicator, “aSOPR.” This modified version excludes tokens traded within one hour of the previous transfer, providing a clearer picture by filtering out short-term trades.
Here is a chart illustrating the 90-day exponential moving average (EMA) of aSOPR for Bitcoin over the past few years:
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It can be seen that the 90-day average has increased during the earlier uptrend this year, indicating a rise in profit-taking as BTC reached new all-time highs. However, with the subsequent bearish trend, aSOPR cooled down from its peak at 1.05 during the surge in profit-taking, but then dropped to 1.01.
The chart shows that aSOPR is approaching the levels seen during the bull market peaks in 2011 and 2017, close to 2021. The current level is similar to the rebound peak before the major bull market in September 2019.
This suggests that Bitcoin may go through a similar pattern and is expected to experience significant growth.
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