Bitcoin aSOPR Profit-Loss Junction continues to act as resistance

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The on-chain data shows that the Bitcoin loss-profit junction aSOPR has continued to act as resistance to the price of the crypto.

Bitcoin aSOPR rebounds from the breakeven line

As one analyst pointed out in a CryptoQuant PublishaSOPR value equal to line ‘1’ has been acting as resistance for about 185 days now.

There “Spent production profit ratio(or SOPR for short) is an indicator that tells us if the average Bitcoin investor is selling with profit or loss right now.

When the value of this metric is greater than 1, it means that the holders as a whole are currently moving their coins with some profit.

On the other hand, the value of the indicator being below the mark implies that the overall market is making a loss at the moment.

Naturally, SOPR values ​​of exactly 1 mean that the average holder is just breaking even on their investment.

A modified version of the metric is the “Adjusted RPSO(aSOPR), which excludes from the data the transactions of all those coins that have moved again within an hour of their last transfer.

Now, here is a graph that shows the trend of Bitcoin aSOPR over the past two years:

The value of the metric seems to have been in the loss region for a while now | Source: CryptoQuant

As you can see in the chart above, the post quant marked the relevant trending areas for Bitcoin aSOPR.

During historical down periods, the indicator has always found strong resistance at the junction between the profit and loss regions, and thus remained stuck below the 1 level.

Also in the current bear market, the metric has remained at values ​​below one. He has made several attempts to break into the profit zone, but so far he has been rejected each time.

The reason behind this is that aSOPR reaching a value of 1 suggests that investors, who were previously at a loss, are now selling at the same price they obtained. Psychologically, this appears to these holders as getting their money back. Therefore, a large number of investors usually give up at this point, providing price resistance.

In the past, proper breaks above the profit-loss junction have signified the start of a new bullish rally. Given that Bitcoin aSOPR is still trapped in the loss zone, it is safe to assume that the market has yet to see through this bear.

BTC price

At the time of writing, The price of bitcoin is floating around $18,800, down 5% in the past week.

Bitcoin Price Chart

BTC has been moving sideways | Source: BTCUSD on TradingView
Featured image from Marco Pagano on Unsplash.com, charts from TradingView.com, CryptoQuant.com
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