Indicator suggests Bitcoin investors are not yet ready for bounce
According to on-chain data shared by Glassnode, bitcoin investors were trying to break even almost every short-term price increase for BTC. Such behavior of investors is considered bearish, as it is one of the main reasons for the lack of upward momentum for Bitcoin.
The SOPR indicator, or the Spent Output Profit Ratio, is calculated by dividing the realized value by the value at creation of a spent output. Simply put, it divides the price sold by the price paid.
Traders sell their holdings at a profit if the SOPR value is greater than 1 and at a loss when the indicator shows a value below 1. The aSOPR version of the indicator ignores all outputs with a lifetime of less than an hour, which allows analysts to see more. Accurate data that better reflects the sentiment among investors as compared to the regular version of the on-chain indicator.
The current spending behavior shows that investors are desperately trying to break even on their position as soon as BTC shows a mild recovery on the market. This fact shows us how little faith most market participants have in Bitcoin, as they are trying to exit from it at the very first opportunity.
For now, bitcoin is not giving any chance to mid or long term investors to exit without loss as SOPR is continuously going below 1. The most recent price recovery was not enough to cover the selling pressure provided by medium term investors as there was no increase in sell orders on 6 to 12 month old wallets.
At press time, Bitcoin is trading at $21,175, with a 2% price decrease in the last 24 hours.
