In the new report prepared by crypto analysis company CryptoQuant, it was highlighted that the SOPR (Spent Output Profit Ratio) indicator, which shows the profit/loss ratio of Bitcoin’s short-term owners, is approaching an important threshold. The fact that this metric has risen above 1.0 again after a short-term decline indicates that the market is at a critical juncture in the short term.
Short-Term SOPR and 1.0 Threshold
Short-Term SOPR and 1.0 Threshold
Short-term SOPR measures whether the resulting Bitcoin is in profit or loss as it is moved between wallets. The 1.0 level marks the break-even point when the purchased coins are sold. When the index remains above this value, it indicates that investors mostly sell at a profit; if it remains below this value, a loss is realized.
Latest Developments and Market Reaction
Latest Developments and Market Reaction
Recently, STH SOPR fell below the 0.95 level for a while. This area is considered to be the area where short-term investors tended to exit the market in the past. However, with the recent recovery, when the index approaches the 1.0 limit again, it is observed that a search for a short-term balance has begun in the market.
Critical Signals and Market Expectations
Critical Signals and Market Expectations
Whether the short-term SOPR can stay above 1.0 for several consecutive days will be decisive for the market. If this scenario occurs, it is thought that the selling pressure of investors who have recently experienced a price decline will decrease and a technical reaction rise may gain momentum. Conversely, if the index remains below 1.0 again, it is reported that the market may move in a narrow band again or the downward movement may strengthen.
CryptoQuant included the assessment, “It is stated that it is important to monitor the persistence of SOPR above the 1.0 level, as a prerequisite for a sustainable recovery.”
At the same time, it was stated that the last decline does not indicate a deeper panic selling like on August 5, 2024. It is noted that on that date, short-term investors made more intense losses and the index dropped to the 0.9 region. It is emphasized that the current decline remains limited above this level.
This difference indicates that the longer-term price structure has not yet fully relieved its tension and that a strong bottom formation may be possible in the event of a harsher selling pressure.
According to the main scenario, a recovery of the 1.0 level could trigger a rally in the short term. However, it is considered that the indicator may need to touch lower levels in order to understand that the market has completely found a bottom.
In terms of the short-term outlook, maintaining the 1.0 level for a few days constitutes the first positive signal for the market.
