SOPR is used to measure total market profit and loss for each trade. It does this by measuring the change between selling and buying prices.
Historically, the index has moved in the 0.9 to 1.35 range. A value of 1 means the market is neutral.
Currently the indicator (orange) shows that the BTC market is in a profitable state as it is above level 1. Until it breaks below it, the downtrend will not be confirmed.
As of March 2020, SOPR has been trading above 1. That means the market is profitable. There was one deviation (black circle) that took place from May to July.
Apart from the deviation, there were four touches (red symbol) on the 1st line, these touches are considered a reset as the market moves from profitable to neutral.
In September, after the second touch, BTC rallied parabolically, nearly tripling its value by March.
After the subsequent drop-and-bounce, the second touch of line 1 took place on December 6th.
The source: Glass knot
In our previous SOPR analysis, we said that if the SOPR falls back below 1 after it is lifted, the spike could be viewed as a relief rally.
This is particularly evident when looking at the 2014-2017 movement.
After the upward trend began, the indicator fell back below the 1 line (black circle) in January – February 2016. However, the indicator only tests the line (red arrow) again, but does not go below it.
The next was in January 2018 and marked the beginning of a two-year bear market.
The source: Glass knot
In the current upward trend, SOPR fell below line 1 in May-July, but later regained it.
So that the current increase cannot be rated as a relief rally, it is therefore important for SOPR to stay above line 1.
The source: Glass knot
You can see the Bitcoin price here.
Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews
Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
SN_Nour
According to Beincrypto
Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page
Discover why Qubetics, Toncoin, and XRP are the best coins to invest in right now.…
Over the years, meme coins have evolved from inside jokes into serious investment opportunities.
Discover BlockDAG's five-tier bonus program's closing phases that enhance buyer holdings. Gain insights on the…
Discover why Qubetics, Solana, and Cardano are redefining the crypto landscape. Learn about milestones, price…
Discover why Qubetics, NEAR Protocol, and Immutable X are the best altcoins to join today,…
BTFD Coin is offering a chance to relive the glory days of meme coin investing,…
This website uses cookies.