The SOPR suggests that the selling pressure on Bitcoin will ease, and the institutions are also still optimistic.
At the beginning of the weekend, Bitcoin ( BTC ) had hoisted itself into a price range of 33,500 – 32,000 US dollars, with the price only staying just above the 32,000 US dollar mark on Sunday.
Some analysts warn that the recent decline is fueled by the fact that institutional investors are slowly becoming “exhausted”.
Nonetheless, some institutional investors are holding onto the hope that Bitcoin Formula scam will climb to $ 100,000 in 2021 . The reason for this is probably that the mood among private investors continues to be good and that new Bitcoin index funds (ETF) have been applied for , which would create further investment vehicles for the crypto market leader.
Although Bitcoin faces resistance at $ 33,000, crypto statistician Willy Woo sees good chances of it going back up. As he explains, the „Bitcoin Spent Output Profit Ratio“ (SOPR) indicates that the course will start again. The key figure SOPR sets the average sales price in relation to the average purchase price for recently traded BTC. If this relative value is greater than 1, selling is worthwhile; below this threshold this would no longer be the case, which is why the selling pressure will probably decrease again for the time being (see graphic below).
“The SOPR is doing a reset. Bitcoin that has been trading in the past few hours are no longer profitable on average. Investors would now lose money if they kept selling. “
Woo thinks it is unlikely that investors will be willing to make losses in order to sell their Bitcoin, which is why he sees the current price level bottoming out. From here it would go up again.
Altcoins and DeFi tokens on the rise
Some decentralized financial services (DeFi) altcoins and cryptocurrencies may gain while the crypto market leader is currently struggling. Polkadot (DOT), AAVE, Curve DAO Token (CRV) and Sushiswap (SUSHI) have all gained between 5% to 7%.
The upturn in DeFi tokens can largely be explained by increased trading activity on decentralized crypto exchanges (DEX), because, as the data from Dune Analytics shows, DEX trading volumes have increased continuously since July 2020, and the total is in DeFi invested fortunes now to a whopping $ 23.89 billion.