Bitcoin, the leading cryptocurrency, continues its slow and quiet rise while compensating for the sharp declines it experienced last week.
As BTC rose above $67,000, CryptoQuant analysts warned investors to be wary of possible corrections and volatility.
Commenting on the SOPR (Spent Output Profit Ratio) ratio here, the analyst pointed out that the SOPR ratio has increased.
At this point, the CryptoQuant analyst stated that the SOPR rate is a widely used measurement in determining peak points, and said that, looking at historical data, the increase in the SOPR rate preceded the increase in the Bitcoin price and the price reached its peak before entering the correction.
Finally, the analyst stated that the rise in the SOPR rate meant that long-term investors could sell profits and warned investors against a potential correction in the coming days.
“The chart below shows changes in the SOPR (Output Output Profit Ratio) Ratio.
When the SOPR ratio rises, it indicates that long-term holders are making more profits than short-term holders. This emerges as a potentially useful metric in determining market peaks.
This rate has generally declined in previous years, but historically we observe patterns where the rise in the rate precedes the rise in Bitcoin price and peaks before the price enters a correction.
When we interpret the current Bitcoin pattern, a high and rising SOPR Ratio may indicate that the market's upward momentum may be exploited by long-term investors and these investors may sell after the rise.
“This means caution should be exercised regarding potential price corrections or increased volatility in the future.”
Long-term holders are taking profits
“Such patterns hint at the likelihood of long-term investors capitalizing on price ascents to realize profits.” – By @Woo_Minkyu
Full post 👇https://t.co/fk7SvHA9v1
— CryptoQuant.com (@cryptoquant_com) April 23, 2024
*This is not investment advice.
