Bitcoin’s Spent Output Profit Ratio (SOPR) has plunged to 0.95, its lowest level since August 2024, potentially signaling a major market bottom and imminent trend reversal. This key technical indicator suggests short-term holders are currently selling at a loss, historically a precursor to significant price rebounds.
Market Analysis: Signs of Capitulation
Bitcoin has experienced extreme volatility recently, dropping from $96,000 to $78,258 before staging a remarkable recovery to $95,000. This price action, combined with the declining SOPR, suggests we may be witnessing a classic market capitulation phase. The recent announcement of Trump’s proposed crypto reserve plan has added another layer of complexity to market dynamics, contributing to a $200 billion surge in total crypto market capitalization.
Understanding SOPR Dynamics
- SOPR > 1: Short-term investors selling at profit
- SOPR < 1: Short-term investors selling at loss
- Current SOPR: 0.95 (Lowest since August 2024)
Technical Confluence Signals
Multiple technical indicators are aligning to suggest a potential trend reversal:
- CME gap fill between $78,000-$80,000
- Most oversold levels since August 2024
- Contrarian buy signals flashing on multiple timeframes
Expert Perspectives
Leading analysts are divided on the immediate price direction. While Andre Dragosch of Bitwise sees an attractive risk-reward opportunity, Standard Chartered’s Geoff Kendrick warns of potential further downside before a sustained recovery. Currently trading at $89,826, Bitcoin shows promising signs of stabilization with a 5.3% 24-hour gain.
Market Implications
The current market structure suggests we’re approaching a critical juncture. Historical data shows that SOPR values below 1 during bull markets often precede significant rallies as sellers become exhausted and new buyers step in at discounted prices.