Here’s what the historical pattern of the on-chain indicator suggests regarding whether or not the time for Bitcoin accumulation is over.
Bitcoin MA aSOPR for 150 days is currently 1.01
As one analyst at CryptoQuant Quicktake pointed out mailthe 150-day moving average (MA) of Bitcoin aSOPR is only 1.01 at the moment. The Adjusted Output Output Profit Ratio (aSOPR) here refers to an indicator that basically tells us whether BTC investors are selling their coins at a profit or a loss.
This metric works by reviewing the on-chain history of all tokens sold/transferred to see what price they were transacted at before. When this price of any coin is lower than the current price at which it is being sold now, it can be assumed that selling that token results in making a profit.
Likewise, coins of the opposite type can be considered as an addition to realizing a loss. aSOPR collects these profits and losses made across the network, and calculates their ratio.
The “rate” in the name of this metric comes from the fact that it filters out currency transactions that were moved within an hour of their last transaction. Transfers like this generally have no impact on the broader market, so it makes sense to take them out of the data.
Now, here’s a chart showing the trend in the 150-day moving average of Bitcoin aSOPR over the past few years:
As shown in the chart above, Bitcoin’s 150-day MA aSOPR has remained above the 1 mark this year, meaning investors as a whole have been making more profits than losses.
Earlier in the year, the index rose to a high of 1.04 as investors booked profits from the rise. As the cryptocurrency continues to consolidate, the measure has declined, with its value now standing at 1.01.
In the graph, quantification highlighted two regions that were historically important for aSOPR. The first is the area below 0.98, where bottoms have historically occurred. At these low levels, investors engage in significant losses. Firm hands pick up coins from these surrenders, helping the price reach the turning point.
The other area is the area above 1.08, where tops have been formed in the past as a result of strong profit taking from whales. So far, the current session has not seen Bitcoin aSOPR visit this area.
“Based on past trends, accumulating Bitcoin until aSOPR reaches 1.04 could be a solid strategy for long-term gains,” the analyst says. “Timing the market by observing whale behavior can be fruitful.”
Bitcoin price
Bitcoin fell to the $65,000 level yesterday, but the coin has already made a recovery with its price now trading around $67,100.