Bitcoin SOPR Gives No Buy Signal Yet After Recent Decline

The Bitcoin price is at $78K, having fallen 1.4% over the past 24 hours. Despite the downward movement, a popular on-chain indicator shows that sellers are still booking profits on their transactions. However, a historically reliable buy signal is still missing, which raises questions among some analysts about whether the bottom has already been reached.

Bitcoin is available at OKX and Bybit.

In short:

• The SOPR indicator shows that Bitcoin transactions are still predominantly being settled at a profit.
• Large-scale loss selling, as seen in 2022, has not been observed in the current decline.
• The SOPR Trend Signal has historically issued buy signals around major price bottoms, but that signal has not yet appeared.

Sellers remain in profit for now

The Spent Output Profit Ratio, better known as the SOPR, measures whether Bitcoin moved on the blockchain is on average sold at a profit or a loss. A value above 1 means sellers receive more than they paid. Currently, that value sits above that level, indicating that no major panic selling is taking place.

That marks a striking difference from the market decline of 2022, when long-term holders and other parties sold en masse at a loss. That situation is not occurring now, according to analyst Joao Wedson on X.

Bullish signal still missing

The SOPR Trend Signal is a derived indicator that uses moving averages to determine when the market is in a structural buying or selling regime. Historically, a green buy signal appeared around Bitcoin’s most important price bottoms, including those of 2015, 2019 and 2022.

That green signal has not yet been issued. Wedson therefore does not want to draw any conclusions yet about whether the bull market has already begun, something other analysts do claim. Among others, Arthur Hayes and CryptoQuant believe the bull market is already underway.

Wedson raises the question of whether Bitcoin will decline again before such a buy signal appears, or whether the market is responding differently this time and such signals simply fail to materialise. He says he prefers to remain patient and would rather wait before declaring the start of a new bull market.

What the indicator does not yet confirm

The Bitcoin Bull Score recently jumped sharply higher, and inflows into Bitcoin ETFs were also positive for seven consecutive days. Even so, the SOPR Trend Signal currently offers no confirmation of a structural trend reversal.

Whether that is a warning or merely a delay in the signalling remains unclear for now. The coming weeks will have to show whether the indicator eventually issues a buy signal, or whether the market indeed seeks out a new low before that happens.