Summary:
Bitcoin nears $95,000 after dropping to $90,000 late Thursday.
SOPR at 0.987 suggests potential buying opportunities.
Short-term SOPR below 1 indicates market capitulation.
Economic data driving U.S. treasury yields affects BTC prices.
Traders awaiting U.S. non-farm payrolls for further market direction.
Bitcoin Price Update
Bitcoin (BTC) has recently approached $95,000 during European morning hours on Friday. This comes after a drop to nearly $90,000 late Thursday, marking a 10% decline from a weekly high exceeding $120,000.
Market Insights
While economic data and profit-taking may have impacted the recent rally, investor behavior signals that purchasing at current price levels could be advantageous for those looking to enter the BTC market.
Onchain data reveals that the Spent Output Profit Ratio (SOPR) has increased to 0.987 as of Friday, indicating that investors who have held their bitcoins for less than six months are selling at a loss. Historically, such conditions often precede price recoveries, suggesting a potential buying opportunity.
Other crucial indicators, including Market Value to Realized Value and the Puell Multiple, combined with a short-term investor ratio of 60%, suggest that the market has not yet peaked. According to CryptoQuant's analyst MAC_D, this week’s correction does not mark the end of the bullish cycle.
“As short-term investors experience more pain, it often presents better opportunities for accumulation,” MAC_D stated. “If prices decline further, savvy investors will likely buy up the coins sold at lower prices by short-term holders. Hence, selling now could be a poor decision.”
Understanding Market Indicators
The SOPR metric evaluates the profit or loss of spent bitcoin outputs by comparing the coins' last moved value to their current value. A short-term SOPR below 1 may indicate market capitulation or a bottom, suggesting it could be a good time to buy.
MVRV assesses Bitcoin's total market capitalization against its realized cap, providing insight into whether Bitcoin is overbought or oversold, which helps predict potential market tops or bottoms.
Economic Influences
The recent surge in U.S. treasury yields, influenced by fresh economic data, has led to declines in equities and risk assets like bitcoin. The latest Institute for Supply Management (ISM) report revealed stronger-than-expected data for U.S. service providers, with the prices-paid measure hitting its highest level since early 2023.
Traders are closely monitoring the upcoming U.S. non-farm payrolls (NFP) release for further positioning. Strong NFP numbers could indicate a robust economy, potentially leading to interest rate hikes, which are generally unfavorable for risk assets, including bitcoin.
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