Economic data and general profit-taking may have dampened the start of Bitcoin’s (BTC) rally, but data tracking investor behavior indicates that buying at current price levels could benefit those looking for a entry into the BTC markets.
Onchain data shows that Bitcoin’s spent profit ratio (SOPR) climbed as high as 0.987 on Friday, suggesting that investors who have held Bitcoin for less than six months are selling at a loss. Historically, this scenario has often preceded a price rally, indicating a potential buying opportunity.
Other well-tracked cycle indicators, such as market value to realized value and the Puell multiple, as well as a short-term investor ratio of 60% indicate that the market has not reached its top, and this week’s correction does not seem to mean the end. of the bull cycle, according to CryptoQuant contributing analyst Mac_D.
“As short-term investors experience more hardship, this often presents better accumulation opportunities,” MAC_D said in an article published Thursday. “If the current price continues to fall, smart investors will likely accumulate the coins sold cheaply by short-term investors. Therefore, selling coins at this stage could prove to be a very unwise decision.
SOPR measures the profit or loss of spent Bitcoin outputs by comparing the value of coins when they were last moved to their value when spent again. Short-term SOPR focuses on coins moving in a relatively short time frame (less than 155 days) and can indicate market sentiment, where a value below 1 could suggest market capitulation or bottoming, potentially signaling a good time to buy.
MVRV compares the total market capitalization (market value) of Bitcoin to the “realized capitalization,” which values each Bitcoin at the price at which it last moved. It is used to assess whether Bitcoin is overbought or oversold, helping to predict potential market highs or lows.
BTC approached $95,000 Friday morning in Europe after a U.S. hours decline sent it near $90,000 late Thursday, down 10% from a weekly high above 120 000 dollars.
New economic data sent U.S. Treasury yields higher on Thursday, sending stocks lower and risky assets such as bitcoin falling at the same time. The Institute for Supply Management’s (ISM) latest report on U.S. service providers proved stronger than expected, with the price-paid metric hitting its highest level since early 2023.
Traders are eyeing the release of U.S. nonfarm payrolls (NFP) figures later on Friday before positioning themselves further, as CoinDesk reported. Strong NFP numbers indicate a robust economy, hinting at possible interest rate hikes, which tends to be bad for risky assets such as Bitcoin.
