aSOPR- On the peer-to-peer bitcoin network, you can transfer bitcoin, a decentralized digital currency. Using cryptography, network nodes verify bitcoin transactions, which are then recorded in a blockchain, a publicly accessible distributed ledger.
Analysis by CryptoSlate indicates that when investors experience significant losses during a bad market, the aSOPR offered by Glassnode typically heralds the beginning of a bull market. At this time, holders give up under the circumstances, and capitulation increases. Despite the BTC market experiencing one of the biggest collapse events in the past four years, buy-the-dip opportunity seekers are pushing for massive accumulation.
The graph below shows the recent decreasing direction of Bitcoin’s aSOPR, below 1. As a result, the indicator’s value is currently at a point that was last attained in 2018, when the bearish cycle peaked.
Break-even traders are indicated by fluctuating aSOPR levels, while profit-taking, which typically occurs before a bear market, is indicated by the indicator heading upward above 1. For instance, according to the aSOPR at the time, the $21K Bitcoin price level was a promising area for profit-taking in October.
Holders continued to sell at a loss in November, however, due to further price drops brought on by the FTX crash.
Holders continued to suffer losses, causing the aSOPR to be adjusted to indicate widespread BTC capitulation as the FTX insolvency proceeded to devastate the markets and add additional turbulence to an already one-year-long bearish cycle. Further evidence that the current cycle may be nearing its bottom is the aSOPR moving to record lows last seen before the 2018 bear market turned bullish. The sole distinction is that the bottom of 2018 had lower lows than today’s market. Consequently, it is still unclear if the market has reached a turning point.
