Bitcoin has been hovering between $27,000 and $28,000 in the last 21 trading days. A historical on-chain analysis of investor sentiment and price action suggests that Bitcoin is on the verge of a potential move towards $45,000.
Bitcoin bulls have been firmly holding the $27,500 price support for the past 3 weeks of trading. During that period, BTC’s on-chain data revealed multiple signs of bullish momentum.
Plus holders of more than 1 BTC Access All-time high of 993,856 Another great indicator of an imminent bullish move is Bitcoin’s Adjusted Output Spent Profit Rate (aSOPR).
Bitcoin Spending Profit Ratio (SOPR) becomes positive
For the first time in over a year, on March 30, the aSOPR bitcoin price rose above 1.0 and continued its upward trend from April 10. This indicates significant bullish momentum, as it often follows periods of exchange rate breakouts against the exchange rate above 1 exponential time periods. Bitcoin price hike.
aSOPR is a time-sensitive metric that measures gain or loss on coins that were recently spent or moved on the blockchain. Essentially, it measures investor sentiment and psychological profit-taking behavior to identify potential price trend reversals in the bitcoin market.
Barring external incidents such as the COVID-19 pandemic, BTC has historically tended to tear on three notable occasions when the aSOPR rose above 1.
On November 22, 2015, aSOPR trended above 1 and peaked at 1.10 in January 2018. During that period, BTC rose 6,100%, from $323 to a new all-time high of $19,500.
In another case, in April 2019, the bitcoin price grew by 150% from around $5,000 to a local peak of $12,500 after the bitcoin price rose above 1.0. After a brief distortion due to the Covid-19 pandemic, the positive aSOPR pattern repeated again in June 2020. Before bouncing back, the price surged 579% from around $9,700 to a new high of $57,000.
On average, when aSOPR is above 1, investors sell their bitcoins at a profit, and vice versa. Investors are usually reluctant to sell at a loss in a bull market. This drastically shrinks supply and puts upward pressure on the price.
The aSOPR has once again started trending above 1.0 since March 30, 2023. If this rare pattern repeats its historical association with bitcoin price spikes, cryptocurrency investors can expect an exponential rise above $40,000 in the coming months.
BTC Price Prediction: $45,000 is a viable target
IntoTheBlock’s Global In/Out of Money chart confirms the bullish outlook for BTC at $45,000. As seen below, BTC is facing three critical resistance areas at $28,900, $30,070, and $33,000. This indicates the minimum, average, and maximum prices paid by 1.1 million addresses for 438,000 coins.
Usually, traders are more likely to sell when prices approach the break-even point. However, with the current Bitcoin trading momentum building, Bitcoin holders may become increasingly unwilling to sell at a loss.
Hence, Bitcoin is likely to reach the next resistance at $33,000 before facing a major pullback.
A break above that area would give BTC’s bullish run a clear path towards the next important resistance at $45,000. However, the 4.81 million break-even addresses holding 2 million bitcoins may be looking to sell, inadvertently slowing the rally.
However, if BTC drops below its current support at $27,300, the bears could take control. But this is difficult, as the 2.84 million addresses that bought 1.34 million coins would be a huge boost.
However, failure to stay above $27,000 could lead BTC price to drop to around $24,300. Around that area, 2.9 million wallet addresses holding 1.5 million coins can support the price.
In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.