Bitcoin (BTC), which rose above $117,000 last week with the FED’s interest rate cut decision, started the new week with a decline.
With Bitcoin falling to $112,000, these declines suggest that declines could deepen further in September, which has historically been known as the weakest month of the year.
At this point, analysis firm Alphractal CEO Joao Wedson said that three indicators show that the cycle is exhausted and are giving bearish signals.
Accordingly, the Alphractal CEO first said that the Spent Output Profit Ratio (SOPR) Trend Signal is giving bearish signals.
SOPR measures whether Bitcoin transactions are profitable or unprofitable on-chain. A reading above 1 indicates sellers are in profit, while a reading below 1 indicates sellers are in loss.
According to the current chart, SOPR is currently trending downward, although it remains above 1. This indicates that the profitability from on-chain transactions is decreasing.
“The SOPR signal is an excellent tool for detecting when profitability on the blockchain is starting to decline. Never in the history of Bitcoin have investors accumulated so late and at such high prices.”
The analyst also noted that the realized price for short-term investors (STH) is at $111,400, which is close to the current market level. A drop below this level could trigger stop-loss sell orders.
The analyst recently noted that despite Bitcoin’s higher price than in previous cycles, its Sharpe ratio is also weaker, meaning risk-adjusted returns are lower, thus reducing profit potential.
Joao Wedson stated that these three indicators signal a decline, and that the social interest will increase again not thanks to Bitcoin, but thanks to altcoins.
*This is not investment advice.
Source: https://en.bitcoinsistemi.com/analyst-company-ceo-issues-serious-warning-for-bitcoin-three-indicators-point-to-further-declines-for-bitcoin/
