Bitcoin’s spent output revenue ratio (SOPR) is calculated by dividing the SOPR of long-term holders (LTH-SOPR) by the SOPR of short-term holders (STH-SOPR). When elevated, it reveals whether or not LTHs are realizing extra income than STHs, which might sign potential market tops.
The SOPR ratio noticed a major spike final week, reaching a two-month excessive of three.55 on March 22. Such sharp will increase usually comply with native market tops as LTHs reap the benefits of rising costs.
The next day, the SOPR ratio declined. Whereas this might point out lowered profit-taking from LTHs, it might additionally present a spike in STH exercise. The spike in Bitcoin’s worth seen on March 23 additional confirms this.
The development reveals that LTHs took benefit of rising costs all through the week, steadily rising their promoting exercise earlier than sharply accelerating. The decline in SOPR after the spike factors to a cooling interval, the place LTHs might have paused aggressive promoting, and STHs picked up the tempo.
A continued decline in SOPR would counsel lowered exercise from LTHs and a rise in promoting strain coming from short-term holders, whereas a sustained improve would sign additional distribution by LTHs.