Happen[In]crypto Take a look at the Bitcoin (BTC) on-chain indicators, specifically the Spent Output Profit Ratio (SOPR) and the RHODL Ratio.
BTC SOPR
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.
The defining characteristic of a bullish trend is that the SOPR bounces on a line instead of falling down.
The SOPR broke below a (red circle) on January 20, 2018, indicating that the previous bullish trend had ended. Later, on December 11 of the same year, it bottomed out at a reading of 0.86. The SOPR had bottomed out 11 months after breaking below one for the first time.
In the current bullish trend, the SOPR broke below the one in May 2021. On 18 June it reached a value of 0.928. This is the third lowest price ever, which is only higher than in December 2018 and March 2020. Additionally, the low was reached 13 months after the SOPR broke below one for the first time.
So, while the dedication hasn’t been as bad in 2018, it has taken longer to grow.
RHODL Ratio
The RHODL ratio is an indicator derived from the ratio between the one week and one to two year HODL wave bands. A reading above 50,000 (highlighted in red) suggests that a significant percentage of the BTC supply is in the hands of short-term holders.
This reading is usually tied to the top, as was the case with the 2013 and 2017 peaks. However, this was not the case in the top of 2021, which was made around 14,000.
The RHODL ratio is currently at 449, which is slightly above the 300 ratio which is considered oversold. The previous bottoms (dark circles) have reached inside this ratio. Significantly, this has not always been the case, as the ratio of the bottom of March 2020 was reached at 1,100 (red circle).
One possibility is that RHODL bottoms are following an ascending support line, as 2019 bottoms were higher than 2015’s. This means that long-term holders keep the supply lower and lower during bottoms as BTC matures.
According to this reading, BTC price has reached or is very close to reaching a bottom.
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