Imminent Retest of the Bull-Bear Junction in the Bitcoin SOPR
How Important the SOPR Is
Recently, a crypto researcher revealed that the SOPR, a significant indicator in the Bitcoin market, is approaching the value of 1. The SOPR serves as a gauge to show if the typical Bitcoin investor is now turning a profit or a loss on their investments.
Loss or Gain?
When the SOPR number is more than 1, it means that the market as a whole is making money. Values below 1 on the other hand suggest that the majority of holders are now experiencing a loss. If the SOPR number is equal to 1, it implies that market gains and losses are equal, showing that the typical investor is breaking even.
Seven-day SMA Bitcoin SOPR Has Crossed The Bar
The 7-day SMA Bitcoin SOPR just crossed the 1 level, as shown in the chart, as the BTC price increased. The signal had previously failed to exceed the threshold after several retests and had been below 1 for over a year. This is so because 1 serves as a psychological level for investors, who view it as the moment at which they have recovered their bear market losses. As a result, there is a lot of selling, which keeps the price from rising.
transition to a market dominated by bulls?
However, in bull markets, the typical holder sees the break-even point as a beneficial entry into the market because they think the price will keep rising. The 7-day SMA Bitcoin SOPR just retested the 1 level from above and effectively served as support, as seen in the chart. This might be an indication that the market is changing from a bearish to a bullish dominance phase.
The Most Recent Changes
The SOPR is once again decreasing and is close to another retest of the critical line as a result of the current price decline. It is still unclear if the bulls will prevail and the price will rise again or whether the bears will gain control and the SOPR will once again go below 1.