A quant has explained how Bitcoin may be expected to see a strong rise in the coming months based on a golden cross that has occurred in this indicator.<\/p>\n
As\u00a0an analyst in a CryptoQuant Quicktake\u00a0post pointed out<\/a>, the Bitcoin Spent Output Profit Ratio (SOPR) has shown a golden crossover recently. The \u201cSOPR<\/a>\u201d here refers to an indicator that tells us whether the BTC investors are selling their coins at a profit or loss.<\/p>\n This metric works by going through the transaction history of each coin being sold\/transferred to see what price it was moved at last time. If this price is less than the current spot price for any token, its sale contributes to profit realization.<\/p>\n Similarly, transactions involving coins of the opposite type imply loss realization is occurring. The SOPR sums up these profits and losses for the entire sell supply, and determines their ratio.<\/p>\n When the value of this indicator is greater than 1, it means the average holder could be assumed to be selling their coins at a net profit. On the other hand, being under the mark implies that the overall market is realizing more losses than profits.<\/p>\n Now, here is a chart that shows the trend in the 30-day and 365-day moving averages (MAs) of the Bitcoin SOPR over the past decade:<\/p>\n As is visible in the above graph, the 30-day MA of the Bitcoin SOPR fell under the 365-day earlier in the year, but recently, it has reversed its direction and has broken past the level. This increase naturally corresponds to the return of notable profit-taking in the sector following the latest rally<\/a> of the cryptocurrency.<\/p>\n In the chart, the quant highlighted the previous instances of this crossover. It would appear that each of these led into bullish price action for the asset.<\/p>\n \u201cAfter the golden cross appears, the market usually starts a strong rise within 2 months at the latest,\u201d notes the analyst. Thus, it\u2019s possible that Bitcoin could be gearing up for another run shortly.<\/p>\n