Happen[In]Crypto takes a look at bitcoin (BTC) on-chain indicators, specifically the spent output profit ratio (SOPR) and the RHODL ratio.
SOPR is an on-chain indicator that shows whether the market is in profit or loss position. Readings above one (black line) indicate that the market is in total profit, while those below one show a total loss.
A characteristic of a bullish trend is that the SOPR bounces in a row and does not fall below it.
This was visible in the 2016-2018 bull market, when the indicator bounced four times (black circle) on a line after breaking out.
Later, it entered a period in which SOPR moved freely up and down one for about a year (black rectangle). This is a sign of an uncertain trend. However, when it comes to the aftermath of such a sustained uptrend, it usually means that the bullish trend has ended.
The period ended with the December 2018 capitulation, in which the SOPR fell to 0.86 (red circle). BTC later started a new bullish trend.
The current bull run as per SOPR was very short, as the indicator bounced only twice on a line (black circle).
Since May 2021, it has been moving freely up and down one, just like it did in 2018. But, there has not been an incident of surrender similar to the one in December 2018. As a result, it is possible that someone will do this. Lastly before the bottom.
The RHODL ratio is an indicator that is constructed by taking the ratio between the 1-week and 1-2 year HODL wave bands. Values above 50,000 (highlighted in red) suggest that a significant percentage of the BTC supply is held by short-term holders. Historically, these values coincide with the top of the market – which was the peak of 2013 and 2017.
This is currently not the case, as the longer term HODL waves are currently nearing an all-time high.
The RHODL ratio is currently at 617, which is higher than the 300 which is considered oversold. The previous bottoms (dark circles) have reached inside this ratio.
Similar to the SOPR chart, it suggests that a surrender event is still possible before the bottom.
However, this has not always been the case, as the March 2020 low was reached at a ratio of 1,100 (red circles).
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