Since the end of June 2023, Bitcoin (BTC) has been in a narrow range between $29,000 – $31,000. Short-term deviations from this tight trading channel have not resulted in a breakout or breakdown in the price of the largest asset.
However, the latest on-chain analysis of the SOPR indicator shows bullish signals for potentially another upward move. If the bullish scenario plays out, BTC could rise as much as 35% in the next few weeks with a target of $38,600.
Short-Term SOPR Gives Bullish Signals
Spent Output Profit Ratio (SOPR) is an on-chain indicator that is calculated by dividing the realized value (in USD) by the value when creating the realized output (in USD). In other words, it is the selling price/buying price. Adjusted SOPR, on the other hand, is the same indicator, only ignoring all outputs with a lifespan of less than 1 hour.
We see a recurring pattern in the short-term aSOPR chart from the first half of 2023. It has already signaled upward movements three times, occurring in February, March, and June.
The pattern looks like this: first, the aSOPR reaches highs around 1.04-1.05. Then it starts to print lower highs and lower lows (red arrows), which come with consolidating the BTC price. Then the SOPR drops and moves below 1 for a while.
Then, at some point, there is a noticeable exhaustion of the downward trend of this on-chain indicator, and the first higher lows appear. The chart begins to turn back upward (blue arrows). The key here is the breakthrough of le
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Author: Jakub Dziadkowiec
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