Bitcoin (BTC) speculators have sold at a loss and this week offers a golden buying opportunity, analysts say.
Data shows that Bitcoin’s so-called spent output profit ratio (SOPR) turned negative for the first time in six weeks on Wednesday.
SOPR Says “Buy The Drop”
A negative SOPR means that sellers have sold BTC at a loss, so the oversold market is good ground for longer-term investors who can benefit from cheap coins. That is why it is considered a classic buy signal.
The last time the SOPR slipped negative was on July 20, just before Bitcoin hit over $ 50,000 again.
“The spent output profit ratio slipped into negative (green) yesterday, as the on-chain speculators sold at a loss,” said Philip Swift, analyst at the trading platform Decentrader, on Twitter on Thursday summarized.
“The picture is similar to that of the financing rates in recent months, as there were many forced sales in the summer, so that there is now more of an opportunity to buy”.
“Good news” for Bitcoin bulls
As Cointelegraph reported, research has shown that Tuesday’s BTC price slump was caused by traders who had such large leverage and could not withstand the selling pressure from the young whales.
In this context: Bitcoin price before “impulsive” recovery: Solana (SOL) leads Altcoin increase
After the market has weeded these players out, optimism about more sustainable price gains is back.
For the on-chain monitoring website Whalemap, SOPR data also suggests a possible increase.
“SOPR is around 1 and that is when the market is trending up. That is good news,” the current level said commented became.
In private comments to Cointelegraph, the Whalemap team added that the market would stagnate a bit before going up again.