Cryptocurrency analyst Ali Martinez evaluated Bitcoin in his statement on Twitter.
"aSORP Value Over 1 in Bitcoin"
Ali Martinez explained that Bitcoin's adjusted Spent Output Profit Ratio (aSORP) data has recently climbed above 1, indicating a bull market.
aSORP is a metric that measures the profitability of coins carried on-chain. It is calculated by dividing the price sold by the price bought, then adjusting for the age of each coin. If the value is below 1, it means that the coins are sold at a loss, if it is above 1, it means that they are sold for profit.
Martinez pointed out that historically an aSORP (90-day) value below 1 indicates a bear market, and a value above 1 indicates a bull market. He also argued that in 2015, 2019 and 2020, this indicator led to an increase of 6,110%, 150% and 579%, respectively.
Another #Bitcoin indicator hints at explosive growth!
Historically, aSORP (90d) below 1 signals a bear market, & above 1 signals a bull market. In 2015, 2019 & 2020, it led to 6,110%, 150%, & 579% gains.
— Ali (@ali_charts) April 9, 2023
The original metric that measures the profitability of coins carried on-chain by dividing the sold price by the purchased price is the SOPR. aSOPR, on the other hand, is a variation of SOPR that eliminates obvious transfer processes by filtering out all UTXOs with a life span of less than one hour.
UTXO stands for Unspent Transaction Output and essentially refers to a wallet balance. By filtering out short-lived UTXOs, aSOPR provides a more accurate signal for actual sell/buy transactions and better captures economically meaningful activities.
*Not investment advice.