Bitcoin (BTC) 150-Day MA aSOPR Currently Has A Value Of 1.01

Here's what the historical pattern of an on-chain indicator suggests regarding whether the time to accumulate Bitcoin is over or not.

Bitcoin’s price has been consolidating around the $66,000-$67,000 mark for the past couple of weeks now. This sideways trend has come after a strong rally earlier in Q4 2021, which saw the cryptocurrency reach a new all-time high (ATH) around $69,000.

Now, an on-chain indicator is suggesting that accumulating BTC at the current levels could set investors up for some solid long-term gains. Here’s what the historical pattern of this indicator has to say regarding whether the time to accumulate Bitcoin is over or not.

Bitcoin 150-Day MA aSOPR Currently Has A Value Of 1.01

As pointed out by an analyst in a recent CryptoQuant Quicktake post, the 150-day moving average (MA) of the Bitcoin aSOPR has a value of just 1.01 at the moment. The “Adjusted Spent Output Profit Ratio” (aSOPR) here refers to an indicator that essentially tells us about whether BTC investors are selling their coins at a profit or loss.

This metric works by going through the on-chain history of all tokens being sold/transferred to see what price they were transacted at prior to this. When this price for any coin is less than the current price at which they are now being sold, then that particular token’s sale could be assumed to be leading to a realized profit.

Related Reading | Analytics Firm Reveals Why Dogecoin & Apecoin Hit Tops

Conversely, coins of the opposite type could be considered to be adding to the realized loss. The aSOPR combines such profits and losses being realized across the network and calculates their ratio.

The “adjusted” in this metric’s name comes from the fact that it filters out transactions of coins that were moved inside an hour of their last transaction. Transfers like these are generally of no consequence to the wider market, so it makes sense to take them out of the data.

Now, here is a chart that shows the trend in the 150-day MA of the Bitcoin aSOPR over the last few years:

Bitcoin aSOPR 150-Day MA has been above 1 for most of 2022. Source: CryptoQuant

As evident from the above graph, the 150-day MA Bitcoin aSOPR has remained above the 1 mark consistently this year, implying that on balance, investors have been realizing more profits than losses.

Earlier in the year, the indicator had grown to a high of 1.04 as investors booked profits from the rally. However, as the cryptocurrency’s consolidation has dragged on, the metric has declined, reaching a value of 1.01 now.

In the chart, the quant has highlighted two zones that have historically been important for the aSOPR. The first is the region below 0.98, where bottoms have historically formed. At levels this low, investors are largely realizing significant losses. Diamond hands are picking up the coins from these capitulators, helping the price find a turning point.

The other zone is the one above 1.08, where tops have formed in the past due to aggressive profit-taking from the whales. So far, the current cycle hasn’t seen Bitcoin aSOPR visit this territory.

“Based on previous trends, accumulating aSOPR until 1.04 could be a solid strategy for long-term gains,” the analyst noted. “Timing the market by observing whale behavior may prove fruitful.”

BTC Price

Bitcoin had plunged to the $65,000 level yesterday, but the coin has already made a recovery as its price is now floating around $67,100.

Related Reading | Bitcoin Profitability Index Hits 202%: Is This Enough For A Top?