In today’s on-chain analysis for Bitcoin
(BTC), BeInCrypto looks at two indicators to confirm current market movements. These are the Spent Output Profit Ratio (SOPR) and the Market Value to Realized Value Ratio (MVRV). Sponsored Sponsored
Both indicators continue to show signs of strength, indicating that the bullish trend is still intact.
SOPR is an indicator that is used to measure whether the market is in a profit or loss state. Its value is obtained by dividing the sell and buy prices for each unspent trade exit (UTXO). The adjusted SOPR (aSOPR) is some variation of this indicator. It does not take into account BTC trades with a lifetime of less than one hour.
As we pointed out in our previous article
on SOPR, a move above the 1 line after a breakdown can be a relief rally if the SOPR cannot hold above 1. Therefore, if the market is in a profit state for a long period of time (green) and then moves to a loss state (red circle), this is a sign of a potential bearish reversal. If the market first returns to a profit state and then takes a loss again, this confirms a bearish reversal.
Currently, the indicator (orange) shows that the BTC market is in a profitable state as it is above 1. As long as it does not break below, a bearish trend reversal is not confirmed.
The MVRV value is the ratio between the market capitalization of BTC and the realized cap
. Therefore, a value of 2 suggests that the market capitalization is twice as large as the realized capitalization.
, the 1.75 MVRV level is crucial for the continuation of the uptrend. Since then, the indicator has rebounded from this level (black rectangle) and continued its upward movement. Currently its value is 2.2.
As long as it does not fall below this level, the uptrend remains intact
. <a href=”https://studio.glassnode.com/metrics?a=BTCcategory=&ema=0&m=market.Mvrv&mAvg=0&mMedian=0&s=1583668052&u=1631145600&zoom=”>Wykres MVRV dzięki Glassnode
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