Categories: Bitcoin

Bitcoin on chain analysis: MVRV and SOPR rise above key levels

Today Bitcoin Magazine will examine Bitcoin’s on-chain metrics, more specifically the Spent Output Profit Ratio (SOPR) and Market Value to Realized Value (MVRV), to determine current market movement.

Both indicators are still showing signs of strengthening, suggesting that the uptrend is still intact.

SOPR

SOPR is an indicator used to measure whether the market is in a profit or loss position. Its value is determined by dividing the sales and purchase prices by each unspent output (UTXO). The adjusted SOPR (aSOPR) is a slight variation on this indicator. It doesn’t care about BTC transactions that are less than an hour old.

As shown in our recent SOPR analysis, a move above line 1 after a breakout could be a rally if SOPR cannot hold above 1.

Therefore, if the market is in a profitable state for a long time (green line) and then moves into a losing position (red circle), this is a sign of a downtrend reversal. If the market returns to a profit but then falls back to a loss, it confirms that the trend has changed from bullish to bearish.

Currently, the indicator (orange) shows that the BTC market is in a profitable state as it was above 1.

The source: Glass knot

MVRV from BTC

The value of the MVRV is the ratio between the market capitalization and the actual capitalization of a coin. Simply put, an MVRV value of 2 means that the market capitalization is twice the actual capitalization.

We indicated in our most recent analysis that keeping the MVRV above 1.75 is critical to the continuation of the uptrend. Since then the indicator has ricocheted off this level (black rectangle) and continues to move upwards. It currently has a value of 2.2.

As long as the MVRV does not fall below the 1.75 region, the uptrend will remain intact.

The source: Glass knot