Bitcoin is trying to rebound above 17 000 USD 📈 SOPR at March 2020 levels ⚡

Cryptocurrencies are trading marginally higher today after Bitcoin managed to defend key price levels below 16 000 USD. Better sentiment on stock exchanges carrying with it a greater appetite for risk ultimately still has a chance to help cryptocurrencies make up for losses caused by the bankruptcy of the FTX exchange and declining confidence in cryptocurrency companies:

Let's take a look at how the Spend Output Profit Ratio (SOPR), which is considered by many cryptocurrency industry analysts as one of the most important signals indicating the extent of the market oversold, looks fundamentally for Bitcoin. 

• If bitcoin remains cyclical, an ever-closer SOPR to historical lows could indicate an ever-closer price bottom. This metric could be relevant to the price of BTC itself because, unlike many on-chain Bitcoin metrics, it is not a lagging indicator and is tracked by a number of analyst firms;
• Although the SOPR has not yet approached historical lows there is a chance that this time its 'bottom' will once again turn out to be higher than in the previous bull market, in view of the 'growing awareness of cryptocurrency investors' over the years;
• We can compare this situation to the time in which Warren Buffett started his business. At that time, fundamental valuation indicators were just beginning to be known and were not widespread thanks to which knowledge of them gave a potential advantage. Today, the market has almost unlimited access to information, making it relatively harder to find opportunities. 

The chart above shows one of the key fundamental metrics of on-chain Bitcoin, the so-called SOPR, which divides the realized value of BTCs (the selling price) by their value at the time of purchase (the buying price), i.e. price sold / price paid. BTC holders are attempting to withdraw funds from crypto exchanges to private wallets, and those who are doing so now often agree to realize years of losses. The SOPR oscillates around 1 and is usually below this level during Bitcoin's bull market and above it during the bull market when investors make greater returns on their invested capital. Unrealized losses increase during a bull market, and the end of a bear market is usually associated with a barrenly low SOPR. On November 14, the seven-day moving average of the SOPR index was 0.9847, the lowest since the COVID-19-related crash in March 2020, when Bitcoin's price fell below $4,000. Source: GlassnodeIf Bitcoin starts to gain, long-term investors are likely to be motivated to sell at the cost price (exit at zero) or slightly above to avoid losses in what has historically signaled 'hanging supply' . In an environment of uncertain buyers, such a situation will create supply pressure. A drop in SOPR below 1 is a significant change in the trend and signals that the so-called 'hodlers' (those not making Bitcoin sales) are slowly turning into sellers. In March 2020, we saw the SOPR dive to 0.9486, still not as low as at the end of the 2018 bear market, which yielded 0.9416. Source: Glassnode4 million wallets now hold at least 0.1 BTC (about $1,700). The index climbed to historic peaks accelerating with the timing of the FTX collapse. Source: GlassnodeBitcoin chart, H1 interval. Looking at the chart of the major cryptocurrency, we can see a double bottom formation, near $15,600, from which demand has already twice pulled Bitcoin out of trouble leading to a rebound. The recent drop below $16,000 was halted by a very large buying candle, built on high volume. The cryptocurrency is once again trading above the SMA50 average and has a chance to test major resistance in the form of the 200-session moving average, which runs at $17,600. Source: xStation5