Bitcoin SOPR Drops Despite Price Surge, Signaling Strong Holder Confidence
Bitcoin’s price has remained resilient above the $100,000 mark, even with several corrections. However, on-chain data shows the Spent Output Profit Ratio (SOPR), a key indicator of market-wide profit-taking, has steadily declined despite the rally. Typically, the SOPR rises alongside Bitcoin’s price, reflecting widespread profit realization. The current divergence—where price climbs but SOPR falls—indicates investors, particularly long-term holders, remain confident, seeing current levels as undervalued and are choosing to hold rather than sell. Supporting this, realized profits have dropped to just $700 million over the last week, compared to $4.5 billion at earlier peaks. Experts note this behavior could support further bullish momentum if accumulation continues. Yet, caution is advised; a sharp sentiment shift could occur if Bitcoin’s uptrend breaks. For traders, the combination of rising price and declining profit realization signals strong holder conviction but also warrants prudence in case of a market correction.
Bullish
The combination of a declining SOPR indicator and surging Bitcoin price implies strong conviction among holders to continue accumulating, with few rushing to realize profits. Historically, such behavior has often preceded significant price rallies, as seen when long-term holders refused to sell during previous major uptrends. However, while this is a bullish signal for the near term, traders should be cautious of potential corrections if sentiment shifts abruptly. Overall, the steady accumulation and low profit-taking support a bullish outlook.