According to on-chain data, Bitcoin SOPR is still assuming flat values, which suggests that investors are unlikely to be willing to sell at that level.
Bitcoin SOPR is stagnating despite the huge surge in crypto price
According to a post by CryptoQuant, while Bitcoin price is showing strong improvement as the coin hits $ 55,000 for the first time since May, the SOPR is still showing a flattened line.
The Spent Output Profit Ratio, or SOPR for short, is a BTC indicator that shows the profit ratio of the entire market. To do this, it looks at the series transactions and compares the price at which a buy transaction took place and the price at which the same coins were sold.
If the value of this indicator is greater than 1, it means that the coins moved in the specified timescale are, on average, sold for a profit.
In contrast, SOPR values below 1 would indicate that BTC was selling at a loss on average. While a value of exactly one would mean that the sellers are just breaking even.
Related reading | Bitcoin inflows show that institutional investors are back on the bull train
Now here is a chart showing the trend of this indicator for BTC:
Bitcoin's SOPR seems to have flattened recently | Source: CryptoQuant
If the indicator shows an increasing value, it means that investors have started to realize their profits by selling their coins.
A falling value, on the other hand, would mean that the holders discard their coins at a loss, probably because they no longer have confidence in the crypto.
Related reading | Whales moving coins indicate the maturity of Bitcoin as a macro asset
As the graph above shows, the SOPR values have neither decreased nor increased recently. The curve for the indicator is just a flat line at the moment.
This is despite Bitcoin’s recent major rally, which would normally see some investors starting to reap their profits, but it doesn’t seem to be the case this time around.
One such trend may be because the majority of holders believe that the price of the coin will continue to rise so they don’t care about their cryptocurrencies just yet.
This unwillingness of investors to sell their Bitcoin can turn out to be pretty bullish for the cryptocurrency. However, once the holders begin to take their winnings, it is likely when a correction could occur.
At the time of writing, Bitcoin’s price is hovering around $ 53.7,000, up 25% over the past seven days. In the past thirty days, the value of the coin has increased by 12%.
The graph below shows the trend in BTC price over the past five days.
Bitcoin's big rise took it to as high as $55.5k, though since then the price has moved rather sideways | Source: BTCUSD on TradingView
Featured image from Unsplash.com, charts from TradingView.com, CryptoQuant.com