Glassnode – Bitcoin Will Soon Break Upside January 26, 2021 January 26, 2021 Kelly Cromley http://1AZFjzw2#Nwf63pYaMWq#xIY
Bitcoin NewsJanuary 26, 2021 by Kelly Cromley

Glassnode – Bitcoin Will Soon Break Upside

A report released by cryptocurrency data aggregator Glassnode has pointed out that Bitcoin’s (BTC) adjusted SOPR (Spent Output Profit Ratio) signals that another round of decline in prices will place many investors in loss. The assessment has been made on the basis of their last transfer of holdings on-chain.

Even though the measure indicates that only a handful of investors are comfortably in profits, Glassnode calls the data as bullish, and said:

“In order for SOPR to go lower, investors would have to be willing to sell at a loss, which is unlikely given the current shape of the market […] We have been looking for this reset in order to generate some stability in the market and pave the way for the next bull run.”

Glassnode explains that the indicator is reflecting the profit-ratio of cryptos on the basis of Bitcoin’s price at the time transfer was made on-chain. aSOPR, being an on-chain measure, Bitcoin movements on centralized exchanges are not considered.

Even though SOPR has been structured to fluctuate around 1, the drastic momentum seen in the past few months has witness Bitcoin’s aSOPR surge over 1.15 by the end of December and the first half of this month. Nevertheless, during bullish market scenario, values of aSOPR lower than 1 are discarded as traders are unwilling to liquidate at a loss.

Glassnode pointed out that aSOPR chart implies that the prevailing price retracement is drawing to a close. From the recent high to low, Bitcoin had retraced 31% when it decline only below $29,000 on January 22. At the time of writing this article Bitcoin was trading at $31,455, reflecting a decline of 8.2% in the last 24 hours.

On January 25, Glassnode pointed out that 2.30 million Bitcoin (BTC) or 12.6% of Bitcoin’s liquidity has moved on-chain while Bitcoin was trading over $30,000, underlining the activity as bullish.
“This is substantial, given that BTC crossed $30k just this year. It suggests investors are injecting capital, and therefore confidence in further price appreciation.”

AuthorKelly Cromley

Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.