For the third time this past week, Bitcoin (BTC) has shown its might by retesting the $44k-$45k support level. As of Feb. 28, BTC had dropped to the key support level of $44,000-$45,000, which shows that it is on a bounce-back mode.
Analysts have weighed in on this by giving an insight on how an increase in miners’ selling might have contributed to this new drop in price. Despite this drop, the bulls might have something to look forward to. Glassnode, a data analytics resource, notes that the daily BTC Spent Output Profit Ratio (SOPR) is gearing up to a full reset.
The SOPR serves as an essential indicator of whether the spent outputs are on a track towards profiting or making losses during the transaction period. It was a first since September 2020 when this key metric turned negative. According to Glassnode, this shows that investors are moving BTC at a modest loss on average, which shows that profit-making has receded.
Bulls Gearing Up For a Turnaround
Philip Swift, the creator of the Golden Ratio multiplier method, co-founder of the trading platform Decentrader, and a popular trader in the BTC sphere also noted the SOPR crash.
Swift is adamant that there might be a potential BTC turnaround because looking at previous starts of uptrends, resets are common. The reset of derivatives seen last week was the signal bulls needed to start preparing for the upward trend. He explained that since the chart was now green, the SOPR had reset, revealing that those wallets that are selling, are doing so at a loss.
He insisted that in a bull market, this is what they call a ‘buy the dip’ signal. Looking at this coupled with derivatives funding, bulls have something to gear up towards.
Coincidental or Real Bull Trigger?
Five months ago when BTC was trading at $10,000 was the last time the SOPR reset was witnessed. During this period, that flip to green was the trigger BTC needed to dive into a new bull market. The price surged by more than five times since then to reach highs of approximately $58,000.
Caution is however encouraged for the month of March, since it has a bearish history, not only for cryptocurrencies but also other markets.
All Eyes on the $44K-$45K Level
Traders are closely watching the key level of $44,000-$45,000. Willy Woo, a notable trader, is confident that the $45K level will take up the strong support mantle. He is sure that any dips below $45K ought to get bought up should they arise.
The entire crypto space is keenly watching BTC, and its strength will be confirmed by how it holds above this $45K level.
Researchers at on-chain analytics firm Santiment noted that this has been a red weekend but everyone is watching BTC rally back while also monitoring the climb made by altcoins. BTC’s on-chain activity will reveal itself once it holds above the $44K support level.
Image courtesy of Flickr