Bitcoin (BTC) chain analysis: SOPR reaches capitulation levels

Be[In]Crypto takes a look at Bitcoin (BTC) on-chain indicators, specifically Spent Output Profit Ratio (SOPR) and RHODL Ratio.

BTC SOPR

SOPR is an on-chain indicator that shows whether the market is in a state of profit or loss. Measurements above one (black line) show that the market has accumulated profits, while those below one show total losses.

The defining feature of bullish trends is that SOPR bounces on one line instead of falling below it.

SOPR collapsed during one (red circle) on January 20, 2018, indicating that the previous bullish trend was over. Afterwards, the bottom was reached on December 11 of the same year, with a reading of 0.86. The bottom was reached 11 months after SOPR first collapsed under one.

In the current bull run, SOPR broke one in May 2021. On June 18, it reached a value of 0.928. This is the third lowest value ever, and is only higher than those in December 2018 and March 2020. In addition, the lowest value was reached 13 months after SOPR first collapsed under one.

So even though the capitulation has not been as bad as in 2018, it has taken longer to happen.

RHODL ratio

The RHODL ratio is an indicator created by taking the ratio between one week and one to two-year HODL waveband. Readings above 50,000 (highlighted in red) indicate that a significant percentage of the BTC supply is in the hands of short-term holders.

This reading is generally associated with peaks, as was the case for the 2013 and 2017 peaks. However, that was not the case in the 2021 summit, which was made at around 14,000.

The RHODL ratio is currently at 449, which is just over the 300 ratio that is considered oversold. Previous bottoms (black circles) have been reached within this ratio. It is worth mentioning that this has not always been the case, since the bottom in March 2020 was reached with a ratio of 1100 (red circle).

One possibility is that the RHODL bottom seems to have followed a rising support line, since the 2019 bottom was higher than the 2015 bottom. This means that long-term owners keep less and less of the offer under the bottom as BTC matures.

By following this reading, the BTC price has reached or is very close to reaching a bottom.

For Be[in]Crypto’s latest bitcoin (BTC) analysis, click here

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