Blockchain Data May Have Foreshadowed Monday's Bitcoin Price Rally
The SOPR indicator, which measures aggregate net profit/loss could signal a BTC market bottom, according to Glassnode data.
Bitcoin was soaring on Monday and, based on an analysis of blockchain data, the price move may have been weeks in the making.
The SOPR dipped below a reading of 1 last week, precisely the level that typically leads to a reversal of a market drawdown, according to Glassnode.
SOPR is used to predict trend reversals by measuring the realized value of the price of BTC sold versus the original purchase price in dollars.
"It would be irrational to sell at a loss when gains are imminent," according to Glassnode.
Bitcoin's price fell Sunday to a seven-week low around $47,100 but has since jumped to around $54,200, up 8.9% over the past 24 hours, based on CoinDesk data.
Will Clemente of Bitcoin Magazine Research, in an April 23 analysis published in the newsletter Pomp Letter, wrote it's "relatively rare to see the aggregate of market participants to take losses in a bull market except during significant corrections.”
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.