It’s still premature to declare a Bitcoin bull run. This Quant Cautions

An analyst has cautioned that it may be premature to declare a Bitcoin bull run, citing the Spent Output Profit Ratio (SOPR) as a key indicator. The SOPR determines whether the average investor is selling their Bitcoin at a profit or loss at present. When the metric is below 1, it suggests that investors are selling at a loss, whereas values above 1 imply they are selling at a net profit. If the SOPR is exactly 1, it suggests investors are breaking even.

The long-term holder (LTH) cohort, consisting of investors who have held their Bitcoin for more than 155 days, is a significant market segment. A chart shows the trend in the 14-day simple moving average (SMA) Bitcoin SOPR for these LTHs, which has been below 1 since May 2022. This means LTHs have been selling their coins at a loss. Historically, a break of the 14-day SMA Bitcoin LTH SOPR above 1 has led to bull runs, but its value has still not reached that level. The analyst warns that it is too early to call the $15.5K level the bear market’s bottom and advises monitoring the LTH SOPR metric to anticipate price direction.