Bitcoin “Profit-Taking Has Completed,” Top Analyst Reveals
20 Maio 2024 - 4:00PM
NEWSBTC
An analyst has explained how profit-taking looks to have finished
for Bitcoin in what has been a “very healthy reset” for the market.
Bitcoin SOPR Suggests Profit-Taking From Investors Has Cooled Off
In a new post on X, analyst Willy Woo has discussed about the
latest trend occurring in the Bitcoin Spent Output Profit Ratio
(SOPR). The SOPR is an on-chain indicator that basically tells us
about whether the Bitcoin investors as a whole are selling their
coins at a profit or loss right now. When the value of this metric
is greater than 1, it means that the average holder in the sector
could be assumed to be moving coins at some net profit currently.
On the other hand, the indicator being negative implies loss
realization is the dominant mode of selling in the market. Related
Reading: Chainlink Becomes Crypto Winner With 21% Rally: What’s
Driving This? Naturally, the SOPR being exactly equal to 1 suggests
the total profits being realized are exactly equal to the losses at
the moment and thus, the investors are just breaking-even on their
selling. Now, here is a chart that shows the trend in the Bitcoin
SOPR over the last few years: The value of the metric seems to have
been neutral in recent days | Source: @woonomic on X As is visible
in the above graph, the Bitcoin SOPR had spiked to highly positive
levels earlier when the cryptocurrency’s price had observed its
rally towards a new all-time high (ATH). This would suggest that
the investors had been participating in some aggressive
profit-taking during this run. From the chart, it’s visible that
such a trend was also observed around the start of the 2021 bull
run. With the consolidation, the asset has gone through since the
ATH, the indicator’s value has also seen a cooldown. As Woo has
highlighted in the chart, the metric has now approached the neutral
mark. It would appear that two months after the profit-taking
peaked, the appetite for harvesting gains has potentially finally
disappeared among the investors. The analyst says this is a very
healthy reset for the cryptocurrency, especially as the capital
inflows have once again been picking up for the coin. Looks like
the indicator has gone through a turnaround recently | Source:
@woonomic From the chart, it’s apparent that the Bitcoin network
flows had been following an overall downward trajectory earlier
when the consolidation was taking place, but recently, capital
injections into the coin have once again been on the rise. Related
Reading: Bitcoin Still Has “A Lot Of Room To Run Before Reversal,”
Says Top Analyst This is a similar trend to what was observed
earlier in the year during the crash following the approval of the
spot exchange-traded funds (ETFs). The turnabout in capital inflows
back then was what led into the rally that took the cryptocurrency
to the current ATH. BTC Price Bitcoin had seen a pullback under
$66,000 yesterday, raising worries that the recovery surge had
already fizzled out. This drop only lasted briefly, though, as the
coin has returned above $67,000 today. The price of the asset
appears to have been consolidating sideways over the last few days
| Source: BTCUSD on TradingView Featured image from Kanchanara on
Unsplash.com, woocharts.com, chart from TradingView.com
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