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Bitcoin Investors Are Trying to "Get Their Money Back," Here Are Results

Fri, 08/26/2022 - 12:08
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Arman Shirinyan
Indicator suggests Bitcoin investors are not yet ready for bounce
Bitcoin Investors Are Trying to "Get Their Money Back," Here Are Results
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According to on-chain data shared by Glassnode, Bitcoin investors were trying to break even in almost every short-term price increase of BTC. Such behavior of investors is considered bearish, as it is one of the main reasons behind the lack of upward movement for Bitcoin.

The SOPR indicator, or the Spent Output Profit Ratio, is calculated by dividing the realized value by the value at creation of a spent output. Simply put, it divides the price sold by the price paid.

Traders sell their holdings at profit if the SOPR value is greater than 1 and at a loss when the indicator shows values below 1. The aSOPR version of the indicator ignores all outputs with a lifespan of less than one hour, which allows analysts to see more accurate data that reflects sentiment among investors better than the regular version of the on-chain indicator.

The current spending behavior shows that investors are desperately trying to break even on their position as soon as BTC shows a mild recovery on the market. This fact shows us how little faith most market participants have in Bitcoin, as they are trying to exit from it at the very first opportunity.

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For now, Bitcoin is not giving any chances to mid- or long-term investors to exit without a loss as SOPR is steadily moving below 1. The most recent price recovery was not enough to cover the selling pressure provided by midterm investors as there was no spike in sell orders on 6- to 12-month-old wallets.

At press time, Bitcoin is trading at $21,175, with a 2% price decrease in the last 24 hours.

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About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.