- The report indicated that Bitcoin
’s Spent Output Profit Ratio (SOPR) and Net Unrealized Profit and Loss (NUPL) indicators have turned green.
- Participants are focused on future price increases and expect either partial profit-taking or plan to hold until higher levels.
- Bitcoin’s SOPR value fluctuates around 1, indicating a struggle between bull and bear trends in the asset’s order flow data.
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According to a new report published by a cryptocurrency exchange, the cryptocurrency market appears to be ready for the next bull run.
A New Report Reveals Strengthening Bullish Outlook
A new report published by cryptocurrency exchange Bitfinex reveals that the latest on-chain metrics and investor behavior indicate that the cryptocurrency market may be ready for the next bull run.
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The report indicated that Bitcoin’s Spent Output Profit Ratio (SOPR) and Net Unrealized Profit and Loss (NUPL) indicators have turned green. This suggests that almost all BTC transactions have been profitable since the leading asset surpassed the $29,500 level.
As long as Bitcoin’s price remains in the range of around $30,000, the asset’s SOPR value stays above 1, indicating that market participants feel secure in their current positions and do not need to sell at a loss. Participants are focused on future price increases and expect either partial profit-taking or plan to hold until higher levels.
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SOPR is an indicator that shows the profitability or loss status of coins moved on the chain. A SOPR value above 1 indicates that investors generally sell their BTC at a profit. If SOPR is below a value, it means they sell at a loss.
Since surpassing the $29,500 level, Bitcoin has maintained a SOPR value above 1. This indicates that most market participants anticipate further price increases and do not want to sell at a loss, similar to a bull market. The report stated:
“This usually keeps the SOPR value above 1 in bull markets, as there is very little supply coming into the market at breakeven prices. In both bull and bear markets, the SOPR value typically finds support and resistance at a value, so continuously staying above 1, as we are now, indicates that we are in an early bull market phase.”
Battle Between Bulls and Bears
While Bitcoin’s SOPR value fluctuates above 1, the asset’s order flow data indicates a struggle between bull and bear trends. On-chain data shows significant buying interest absorbed by limit sell orders, creating a region that could determine BTC’s direction in the coming weeks.
On the other hand, on-chain data reveals a significant increase in miners sending Bitcoin to exchanges. Such activity is typically seen in two scenarios: during the surrender phase of a bear market or in the early stages of a bull market.
However, on-chain data shows that miners’ movements are primarily aimed at using BTC as collateral for derivative transactions rather than selling directly on the spot market. This prevents an immediate bearish impact on prices.