One of the on-chain indicators of Bitcoin, which correctly determined the bottom of the 2018 bear cycle, has now reached its lowest level since 2018.
Bitcoin’s Adjusted Spent Output Profit Ratio (aSOPR), which indicates whether holders are collectively selling in profit or loss, recently experienced a bearish move below the “one” level, according to CryptoSlate. Placing this index below level 1 means that Bitcoin holders are selling their assets at a loss on average.
When Bitcoin holders take heavy losses on their trades (sales) based on aSOPR data, the trend is often expected to change from bearish to bullish.
In other words, this index reaches its bottom in a situation where investors give up on their decision to hold Bitcoin and avoid selling at a loss, and mass selling in the market intensifies. In order to continue such a scenario, it is predicted that by buying at the price floors of a part of the investors and accumulating more units, the overall trend will eventually change; Even now, the Bitcoin market is experiencing one of its biggest mass selloffs in four years.
As can be seen from the chart below, Bitcoin has recently experienced a bearish move below the one level and has fallen to levels not seen since 2018.
When the value of the aSOPR index is exactly equal to 1, it can be said that the coins that moved that day, on average, broke even, and if the value of the index is greater than 1, it can be said that the coins that moved that day, on average, broke even. have been sold; In fact, their selling price was higher than their buying price.
The deeper fall in prices in November, under the influence of the bankruptcy of the FTX exchange, increased the tendency of investors to sell at a loss, and the more turbulent market conditions caused the volume of losses suffered by Bitcoin holders in their sales to increase, and the aSOPR index fell to very low levels. slow
As mentioned at the beginning, the index last fell below its recent low in late 2018, after which prices began to recover and the market trend turned bullish. Accordingly, it can be said that the bottom of the current Bitcoin cycle is probably close.
The only difference is that the floor of aSOPR in 2018 is slightly lower than the recent floor of this index; Therefore, it is not possible to say with certainty whether the downward cycle of Bitcoin has come to an end or not.