In an article on CryptoQuant Quicktake, an analyst pointed out that the adjusted Spent Output Profit Ratio (aSOPR) of Bitcoin has not yet reached the heights seen during the peak of the previous bull market.
“SOPR” is a widely used on-chain indicator that shows whether investors are selling their held coins at a profit or a loss. This indicator looks at the blockchain history of each transaction token to determine its previous transaction price. If the selling price of a token is higher than its last transaction price, a profit is generated. Conversely, selling at a lower price indicates a loss.
SOPR also indicates the balance between gains and losses in the network. A value greater than 1 signifies that investors, on average, are selling for a profit, while a value lower than 1 indicates more investors are selling at a loss.
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For the current analysis, the focus is on the adjusted version of this indicator, “aSOPR.” This modified version excludes tokens that were transacted within an hour of the previous transfer, providing a clearer picture by filtering out short-term trades.
Here is a chart illustrating the 90-day Exponential Moving Average (EMA) of aSOPR for Bitcoin over the past few years:
It can be observed that the 90-day average has increased during the earlier uptrend this year, indicating increased profit-taking as BTC reached new all-time highs. However, with the subsequent bearish trend, the aSOPR cooled off from its peak at 1.05 during the period of increased profit-taking and then dropped to 1.01.
The chart shows that the aSOPR is approaching the levels seen during the peak of the bull market in 2011 and 2017, similar to the rebound peak before the major bull market in September 2019.
This suggests that Bitcoin may experience a similar pattern and is expected to see significant growth.
