Analysts say that Bitcoin (BTC), which has been selling at a loss by speculators, is now a great time to buy.
Data shows that Bitcoin’s output profit ratio (SOPR), has flipped to negative on Wednesday for the first time since six weeks.
SOPR: “Buy the Dip”
Negative SOPR is a classic buy signal. It means that sellers are dumping BTC at loss and the market is ready for long-term hodlers to make a profit from cheap coins.
SOPR was last negative on July 20, just before Bitcoin launched to reclaim $50,000.
“Spent output profit ratio went negative (green), yesterday as on-chain traders were selling at loss,” Philip Swift, an analyst from trading platform Decentrader, explained to Twitter followers.
“Paints an incredibly similar picture to recent funding rates in that there was a lot forced selling over the summer, making this more of a buy/the-dip opportunity right now.”
Chart of Bitcoin SOPR. Source: Decentrader
Bitcoin bulls are in for “good news”
Cointelegraph reported Tuesday’s BTC price drop as a result of overleveraged traders who couldn’t withstand the selling pressure from young whales.
Related: Bitcoin price poised for an ‘impulsive bounce,’ Solana (SOL), leads altcoin surge
After these players were removed from the market, optimism returned with more sustainable price increases.
Whalemap is an on-chain monitoring resource. Meanwhile, SOPR data suggests that higher levels may return.
Staff commented that “SOPR around 1 is good news in an up-trending marketplace”
Whalemap’s private comments to Cointelegraph stated that the market should be “a bit more sideways” before it can go up.