Is Too Late To Accumulate Bitcoin? What This Indicator Says
October 24 2024 - 9:00PM
NEWSBTC
Here’s what the historical pattern of an on-chain indicator
suggests regarding whether the time to accumulate Bitcoin is over
or not. Bitcoin 150-Day MA aSOPR Currently Has A Value Of 1.01 As
pointed out by an analyst in a CryptoQuant Quicktake post, the
150-day moving average (MA) of the Bitcoin aSOPR has a value of
just 1.01 right now. The “Adjusted Spent Output Profit Ratio”
(aSOPR) here refers to an indicator that basically tells us about
whether the BTC investors are selling their coins at a profit or
loss. This metric works by going through the on-chain history of
all tokens being sold/transferred to see what price they were
transacted at prior to this. When this price for any coin is less
than the current price at which they are now being sold, then that
particular token’s sale could be assumed to be leading to profit
realization. Related Reading: Analytics Firm Reveals Why Dogecoin
& Apecoin Hit Tops Similarly, coins of the opposite type could
be considered to be adding to the loss realization. The aSOPR
combines such profits and losses being realized across the network,
and calculates their ratio. The “adjusted” in this metric’s name
comes from the fact that it filters out transactions of coins that
were moved inside an hour of their last transaction. Transfers like
these are generally of no consequence to the wider market, so it
makes sense to take them out of the data. Now, here is a chart that
shows the trend in the 150-day MA of the Bitcoin aSOPR over the
last few years: As displayed in the above graph, the 150-day MA
Bitcoin aSOPR has consistently remained above the 1 mark this year,
which implies the investors as a whole have been realizing more
profits than losses. Earlier in the year, the indicator had grown
to a high of 1.04 as the investors had taken the profits of the
rally. As the consolidation of the cryptocurrency has dragged on,
though, the metric has declined, with its value now sitting at
1.01. In the chart, the quant has highlighted two zones that have
historically been significant for the aSOPR. The first is the
region under 0.98, where bottoms have historically occurred. At
levels this low, the investors are participating in notable loss
realization. Resolute hands pick up the coins from these
capitulators, thus helping the price reach a point of turnaround.
Related Reading: Bitcoin Profitability Index Hits 202%: Is This
Enough For A Top? The other zone is the one above 1.08, where tops
have formed in the past as a result of the aggressive profit-taking
from the whales. So far, the current cycle hasn’t seen the Bitcoin
aSOPR visit this territory. “Based on previous trends, accumulating
Bitcoin until aSOPR reaches 1.04 could be a solid strategy for
long-term gains,” says the analyst. “Timing the market by observing
whale behavior may prove fruitful.” BTC Price Bitcoin had plunged
to the $65,000 level yesterday, but the coin has already made
recovery as its price is now floating around $67,100. Featured
image from Dall-E, CryptoQuant.com, chart from TradingView.com
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