Bitcoin’s SOPR at Three-Year Low Means This for Your Investment

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BTC’s SOPR has fallen to its lowest level in three years. Coins sit idle on the BTC network and whales have slowed their accumulation.

The main bitcoin coin [BTC] is about to end the business year in the $16,500-$17,000 price range, its spent production profit ratio (SOPR) recently hit a three-year low, Gaah, an analyst at CryptoQuant, December 21.

ReadBitcoins [BTC] Price prediction for 2023-2024

According to Glassnode academy, an asset SOPR offers insight into the general market sentiment towards the asset and the degree of profit and loss suffered by its holders over a given period.

When an asset’s SOPR is greater than one in a given period, it means that those who sold at the current price have made a profit. Conversely, when a SOPR of assets is less than one in a specified window period, those that were sold within that time frame suffered losses.

Analyzing the SPOR of Bitcoin

As of December 21, BTC’s SOPR was 0.98, according to data from CryptoQuant. Since Nov. 23, BTC’s SOPR has returned a value of less than one, meaning holders who have since sold suffered losses.

Source: CryptoQuant

Gaah confirmed that in the current BTC market:

The SOPR ratio below 1.00 reaching new lows could mean that investors are making a loss and/or that the remaining coins of the profit-based costs are not being spent.

Taking inspiration from BTC’s historical performance, Gaah said:

When this ratio returns above the value of 1.00, it is possible to witness a new bull market again, because historically this behavior has been exhibited at least 3x.

Source: CryptoQuant

Inactive pieces must play

At the time of writing, BTC traded hands at $16,807.99, according to data from CoinMarketCap. As prices rose 7% last month, the accumulation of whales declined. According to data from Santiment, addresses of BTC whales that held between 1,000 and 100,000 BTC have fallen by 2% over the past month.

In contrast, sharks that held one to 1,000 BTC intensified their accumulation over the same period, with their numbers increasing by 2%.

In a bear market, there must be signs of whale accumulation before the price bottoms out. However, in today’s market, with slow spending on whales, the bottom may not yet be reached.

Source: Santiment

How many BTC can you get for $1?

The FTX debacle led to movement in long-held/dormant BTC as investors shifted their assets. A look at the age of BTC consumed revealed that long-held coins have returned to dormancy.

Often, a rise or fall in price is usually precipitated by a spike in its age-consumed metric. However, with the age of BTC consumed at significant lows over the past month, a price rally may not occur in the near term as the coins have been sitting idle on the BTC network.

Source: Santiment

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