Here’s what historical patterns of an on-chain indicator indicate about whether the time to accumulate Bitcoin has ended or not.
Bitcoin 150-Day MA aSOPR Currently Stands at 1.01
As noted by an analyst in a CryptoQuant Quicktake post, the 150-day moving average (MA) of the Bitcoin aSOPR currently has a value of just 1.01. The “Adjusted Spent Output Profit Ratio” (aSOPR) is an indicator that essentially informs us whether Bitcoin investors are selling their coins for a profit or a loss.
This metric functions by reviewing the on-chain history of all tokens sold or transferred to determine their prior transaction prices. If the price at which a token was purchased is less than its current selling price, it can be inferred that the sale is resulting in profit realization.
Conversely, coins sold at a lower price can be viewed as contributing to loss realization. The aSOPR combines these realized profits and losses across the network and calculates their ratio.
The term “adjusted” in this metric refers to the exclusion of transactions involving coins that were transferred within an hour of their last transaction. These types of transfers typically have little impact on the overall market, making their exclusion reasonable.
Now, here’s a chart that depicts the trend in the 150-day MA of the Bitcoin aSOPR over the past few years:
As shown in the graph above, the 150-day MA Bitcoin aSOPR has consistently remained above the 1 threshold this year, suggesting that investors, on the whole, have been realizing more profits than losses.
Earlier in the year, this indicator reached a peak of 1.04 as investors capitalized on the profits from the rally. However, as the market consolidation continued, the metric has decreased and is currently at 1.01.
The chart highlights two zones that have historically been important for the aSOPR. The first zone is below 0.98, where market bottoms have typically occurred. At such low levels, investors tend to realize substantial losses. Strong hands often acquire coins from these capitulators, helping the price to rebound.
The second zone is above 1.08, where market tops have formed previously due to aggressive profit-taking by whales. So far, the current cycle has not seen the Bitcoin aSOPR enter this territory.
“Based on historical trends, accumulating Bitcoin until the aSOPR reaches 1.04 might be a sound strategy for long-term gains,” the analyst suggests. “Monitoring whale activities could also offer beneficial timing for market entries.”
BTC Price
Bitcoin dropped to the $65,000 mark yesterday, but it has since recovered, with its current price hovering around $67,100.
