Bitcoin SOPR Indicator Sees Steady Decline Even As BTC’s Price Rallies – Here’s What It Means

Bitcoin’s price has displayed remarkable resilience as the largest crypto asset holds strong above the $100,000 milestone despite several pullback attempts. During the robust bullish performance of BTC in the past few weeks, on-chain data shows that the SOPR indicator has been dropping sharply.

Key Bitcoin SOPR Indicator Dips Sharply

As Bitcoin continues to show upside strength, Rafaela Romano, a crypto enthusiast, highlighted that a significant divergence is developing below the surface. In a surprising turn of events, Bitcoin’s Spent Output Profit Ratio (SOPR) Indicator has witnessed a notable decline amidst a stunning rise in BTC’s price.

The crypto enthusiast reported the unusual development in a recent post on the X platform. In the past, the SOPR indicator, a key on-chain metric used to gauge overall market profitability, has aligned strongly with BTC’s performance.

 When the price climbs, the Spent Output Profit Ratio rises as well, hitting new highs at every new price point. Such an alignment between price movements and the indicator’s upside move is reflected by huge profit-taking from investors and traders during price spikes.

However, while Bitcoin’s price has risen strongly and is holding beyond the $100,000 mark, this metric has been falling at a rapid pace. “Interestingly, the price of Bitcoin has been rising, but profit-taking is not keeping up,” the crypto enthusiast stated.

This current divergence suggests that many investors are confident about the flagship asset’s prospects in the short term as they continue to accumulate and hold their coins. According to the enthusiast, the trend is a sign that BTC holders, especially seasoned investors or long-term holders, still consider the $100,000 level a cheap value. 

A bullish sentiment of this magnitude among seasoned investors could pave the way for BTC’s next major rally in the short term as long as these key players continue to purchase the asset.

A Weakened BTC Net Realized Profits

Investors’ conviction in Bitcoin is undoubtedly growing strong in the current market environment. Another crucial indication of waning profit-taking by investors is a continued decrease in the BTC Net Realized Profit.

Related Reading: Bitcoin Long-Term Holders Strengthen Their Grip As Realized Cap Climbs To Uncharted Territory

As reported by Darkfost, a verified author and on-chain expert, this metric has decreased even as BTC maintains its upside trajectory compared to past scenarios. In early 2024, when Bitcoin reached a top, the net realized profits rose to $3.5 billion. Also, when the asset climbed to its previous top in January this year, profit-taking grew to $4.5 billion.

Meanwhile, data shows that profit-taking declined sharply to $1.8 billion following BTC’s surge to its current top in May. Currently, realized profits have decreased further, dropping to barely $700 million in the last seven days after reaching $110,000 on Thursday.

Darkfost noted that the trend suggests most BTC holders remain patient on the sidelines, opting to hold instead of taking profits. However, the expert has underscored the importance of caution as a shift in sentiment is probable if BTC loses its uptrend and enters a correction phase.