BTC records Largest capitulation as SOPR hits lowest since 2018

The adjusted return on consumption output (aSOPR), an indicator of whether holders are selling profitably or losing money, has registered a downward trajectory below the 1 level.This suggests that investors are selling positions with large losses

according to crypto slate According to our analysis, the aSOPR provided by Glassnode usually marks a transition to a bull market when investors notice large losses in a bear market. At this point the holders give up on the status quo and surrender deepens. So we’re leading the dip-buying opportunists who are driving significant accumulations even as the BTC market witnesses one of the most significant capitulation events in four years.

Bitcoin’s aSOPR trend shows a recent downward trajectory below 1, as shown in the graph below. As a result, the indicator’s value is now at the level last seen in 2018, when the bear cycle reached its trough.

Fluctuating aSOPR levels suggest break-even traders, while an uptrending indicator above 1 indicates profit taking, which usually precedes a bear market. For example, the $21,000 Bitcoin price level was an interesting profit-taking zone as indicated by the October aSOPR.

However, the price fell further amid the FTX crash in November, and holders continued to tend to lose money.

As holders continued to see more losses as the FTX crash continued to ravage the market, adding further turmoil to an already year-long bear cycle, the aSOPR was adjusted to signal a broader BTC capitulation. I got

Additionally, aSOPR has shifted to the last historical low seen before the 2018 bear market turned bullish. This could indicate that the current cycle is nearing its bottom.

The only difference now is that the 2018 trough is lower than the current trough. Therefore, it is still unclear whether the market has finally reached the transition point.