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Is the Bitcoin rally over? New Insights from CryptoQuant Predict a Market Slowdown – TradingView News
According to the latest insight from a CryptoQuant analyst, Bitcoin could be poised for a notable price correction. This possibility of a price correction is based on key Bitcoin metrics such as the Adjusted Profit and Output Spent Ratio (ASOPR), signaling a notable implication for Bitcoin’s trajectory.
Understanding the Role of ASOPR in Predicting BTC Corrections
ASOPR, a key indicator in the crypto market, measures the profit rate of spent proceeds by comparing the value at which coins were purchased with the value at which they were sold.
According to the CryptoQuant analyst, when this ratio exceeds 1, it suggests that coins are being sold at a profit, which is often related to bullish market conditions.
However, a critical threshold observed in historical data is when the ASOPR approaches 1.08. At this point, the market tends to change, signaling a potential start of a correction phase.
This pattern has been consistent over several market cycles, providing a valuable tool for investors to assess market health. For example, when ASOPR steadily rises above 1 but approaches the 1.08 mark, investors may consider this an opportune time to evaluate their positions ahead of potential recessions.
The CryptoQuant analyst particularly noted:
Considering past cases where similar patterns were observed, there is a possibility that the current situation follows the same (downward) trend.
Another critical component the analyst mentioned in his BTC market analysis is the 200-day moving average (MA), widely considered as a barometer for the market’s long-term trend.
This indicator helps smooth price data by creating a constantly updated average price, which can be key in confirming the general direction of the market. A rising 200-day MA suggests a long-term uptrend, while a declining one could indicate a bear market.
According to the chart shared by the analyst, Bitcoin’s performance below this key moving average currently confirms the cautious stance suggested by ASOPR.
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With the price hovering around US$64,000, a 14% drop from its recent peak, the convergence of these indicators suggests that the market may still be in a phase of reassessment and potential adjustment.
Bitcoin’s Continued Stagnation
The prediction of the above metric is quite evident as the value of Bitcoin continues to fall despite significant positive developments in the industry.
Earlier today, Standard Chartered Plc announced the launch of a new trading desk for Bitcoin and Ethereum, marking a significant move into cryptocurrency spot trading by one of the world’s largest banks.
Additionally, the Winklevoss twins, founders of crypto firm Gemini, publicly supported Donald Trump’s presidential campaign, donating $1 million each BTC for being a “pro-Bitcoin” candidate.
However, these developments have not spurred any significant upward movement in the price of Bitcoin, which has seen a 1.1% decline over the past 24 hours to $63,935.
Analyst Ansem predicts that Bitcoin may not see a significant price increase until the end of this year, anticipating that it will remain between $58,000 and $60,000 for some time.
Featured image created with DALL-E, TradingView chart