Critics say Bitcoin’s bottom may be getting closer

Bitcoin might be in the process of creating a local bottom according to at least one strong on-chain indicator.

  • According to at least one on-chain indicator, Bitcoin’s cost could be getting nearer to a local bottom. This is because the cryptocurrency is trading close range of about $30k for quite a while.
  • Currently, the bitcoin price is about 57% below its all-time high reached in November last year.
  • One technical indicator – the long-term output profit ratio (LTH-SOPR) – suggests that the bottom may be nearing.
  • Based on the USD value of spend outputs divided by the USD value of spend outputs at the creation time, the LTH SOPR is calculated. To put it another way, the realized value is divided by its value at creation.
  • This is the lowest LTH-SOPR since the COVID crash in March 2020. As of then, its value had dropped to 0.53, indicating that some pain might be ahead.
  • As for the cryptocurrency fear index, it remains in the “extreme fear” territory. Investors remain especially fearful at the present according to this metric, which is used to gauge the current market sentiment.