“Buy The Dip” Mentality Returning To Bitcoin? This Metric May Suggest So
-
Loading... - Diarra Kadida
- 23 Feb 2023
- 69 Views
- 0 Like
- 0 Comment
Data from this on-chain metric is currently forming a pattern that can suggest the “buy the dip” mentality is returning to the Bitcoin market.
Bitcoin aSOPR (7-Day EMA) Bounced Off The 1 Line Recently
As per the latest weekly report from Glassnode, the aSOPR has retested the 1 line recently. The “Adjusted Spent Output Profit Ratio” (aSOPR) is an indicator that measures the ratio between the profits and losses that are being realized in the Bitcoin market right now.
The metric has “adjusted” in the name because it filters out all sales of tokens that took place only one hour after the last one. Making this adjustment helps remove noise from the data that wouldn’t have had any long-term consequences on the market.
When the value of the indicator is greater than 1, it means the average investor is selling coins at a profit currently. On the other hand, values below the threshold suggest the overall market is realizing losses at the moment.
Naturally, the aSOPR having a value exactly equal to 1 implies the holders are just breaking even on their selling right now as the profits being realized are exactly making up for the losses.
Now, here is a chart that shows the trend in the 7-day exponential moving average (EMA) Bitcoin aSOPR over the past year:
Looks like the 7-day EMA value of the metric has gone up in recent days | Source: Glassnode's The Week Onchain - Week 8, 2023
As shown in the above graph, the 7-day EMA Bitcoin aSOPR had been under the 1 level during the bear market, but with the latest rally, the metric has successfully broken above the mark.
This means that during the bear market lows, the investors had been selling at losses, but thanks to the latest price surge, they have entered into enough gains to be able to move coins at a profit. Read More…
